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The purpose of this article is to explain the spread between spot rates on corporate and government bonds. We find that the spread can be explained in terms of three elements: (1) compensation for expected default of corporate bonds (2) compensation for state taxes since holders of corporate bonds pay state taxes while holders of government bonds do not,(More)
1 We are very grateful to Kumar Visvanathan for graciously sharing the data on foreign currency derivatives. We also greatly appreciate comments received Abstract We examine whether ¯rms use foreign currency derivatives for hedging or for speculative purposes. Using the sample of all S&P 500 non¯nancial ¯rms for 1993, we ¯nd strong evidence that ¯rms use(More)
  • K. J. Martijn Cremers, Vinay B. Nair, +6 authors Daniel Wolfenzon
  • 2004
This paper investigates the effect of shareholder control on bondholder wealth. While stronger shareholder control can benefit bondholders by disciplining managers, it also increases the likelihood of events that can hurt bondholders, e.g. hostile takeovers. We hypothesize that shareholder control can have contrasting effects on bond yields depending on the(More)
This paper examines problems in the CRSP Survivor Bias Free U.S. Mutual Fund Database ~CRSP, 1998! and compares returns contained in it to those in Morning-star. The CRSP database has an omission bias that has the same effects as survi-vorship bias. Although all mutual funds are listed in CRSP, return data is missing for many and the characteristics of(More)
This study examines the degree to which the well-known Morningstar rating system is a predictor of out-of-sample mutual fund performance, an important issue given that high-rated funds receive the lion's share of investor cash inflow. We use a data set based on growth mutual funds that is free from survivorship bias and adjusted for load fees to examine the(More)