MCG CF

Who are the authors of the paper?

• Malmendier and Tate

• Heaton and Hull

• Kaplan and Zingales

• Tate and Hull

What are the traditional explanations of capital misallocation?

• Agency Theory and Theory of Self Efficacy

• Hubris Effect and 'Better Than Average' Effect

• Agency Theory and Pecking Order Theory

• Pecking Order Theory and Hubris Effect

What is the first hypothesis of the paper?

• Capital Markets are inefficient

• Investment decisions of overconfident CEOs are more sensitive to cash-flow

• Investment distortions are caused by asymmetric information

• Debt dependency is important for investment

What companies does the main data set contain off?

• Forbes 500

• Listed companies in the UK

• DAX 40

• Unlisted companies in Malta

What are the three measures of overconfidence defined by the authors?

• Holder, Buyer, Seller

• Holder 67, Longholder, Net Buyer

• Holder 33, Longholder, Gross Buyer

• None of the above

Which financial constraint index is used in the paper?

• Whited-Wu Index

• FTSE 100 Index

• Hang Seng Index

• Kaplan-Zingales Index

At which level are the results statistically significant?

• 67%

• 10%

• -5%

• 1%

Which branch of economics do the authors refer to ?

• Macroeconomics

• Behavioural Economics

• Microeconomics

• Agricultural Economics

What is one of the major learnings?

• All professionals are overconfident

• New corporate governance models are required

• Environmental policies are important for companies

• Presidency elections impact corporate profitability