Abstract
The work developed on this paper aims to exploit the adaptive nature that investors perceive risk and return, emphasizing the effects that context has on decision-preferences. Based on the concepts developed on the Adaptive Market Hypothesis and The Context Theory, the empirical analysis dissecting stock returns of Brazilian companies identified that investors adjusts and adapts its risk/reward expectations based on the broad market context. The methodology used in this paper measure and ranks the Brazilian listed securities by their respective F-Score, a fundamental measurement developed by Piotroski. The findings of this paper indicate that undervalued firms consistently and significantly outperforms overvalued firms, incurring in significantly lower risk.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.