The Department of Finance in the Broad College of Business prepares students to look beyond quantitative reasoning in order to discover innovative solutions to the most prominent issues confronting today’s (and tomorrow’s) businesses. Our flexible programs and curriculum specializations in corporate finance and financial markets allow students to focus on their specific areas of interest within finance.
Welcome to the Department of Finance in the Eli Broad College of Business. We invite you as prospective or current Broad College students to learn about the dynamic world of finance. While you will become grounded in finance fundamentals, you will also grapple with the underlying causes of economic problems and the many risks businesses face in today’s complex global world. You will learn from our innovative faculty who foster a collaborative learning environment with their dedication to student success. Insights and findings from faculty’s cutting-edge research will inform your discussions.
The department encourages our students to participate in co-curricular opportunities offered by the Financial Markets Institute, the Center for Venture Capital, Private Equity and Entrepreneurial Finance, and the Student Investment Fund. Further explore your interests through one of our student organizations: Finance Association, Spartan Global Development Fund, Student Investment Association and the Wealth Management Association. In addition to engaging with peers who share similar interests, these organizations provide wonderful opportunities for leadership development.
The department welcomes contact from employers interested in learning about our student talent. If you would like to learn more, please contact Russell Palmer Career Management Center.
We invite you to learn more about how the Department of Finance is helping Eli Broad College realize its vision of becoming a top-of-mind business school and transform students into the leaders of tomorrow.
The Department of Finance offers bachelor’s, master’s and doctoral degree programs, all designed to account for curriculum specialization to a student’s particular interests in finance. Our programs also prepare students for roles in the related fields of marketing, production, supply chain and human resources. This tailored approach empowers students to achieve their unique career goals in finance and across all areas of business.
Research areas cover all major areas of finance including corporate and behavioral finance, contracting and asset pricing.Explore Program
Emerge with a breadth of financial knowledge, from fundamental analysis to asset management, and hone skills in corporate strategies and leadership.Explore Program
Gain the leading-edge financial planning knowledge, relationship management skills, and technology acumen to help both individual and institutional clients make smart choices with their financial assets from this registered CFP Program.Explore Program
The discipline of finance comprises corporate financial management, management of financial institutions, and investments. An understanding of financial concepts, financial instruments and financial management decision-making are vital to each. Employment opportunities exist in industrial and brokerage firms, public utilities, banks, insurance companies, credit unions and agencies of government.Explore Program
The Minor in Financial Planning and Wealth Management is designed to provide students with a solid understanding of the concepts and techniques used by wealth management advisors to help individual and institutional clients. As the industry continues to evolve, students will gain the necessary skills to help firms meet the expanding needs of their client base.Explore Minor
Ideal for students pursuing careers as underwriters, claim adjusters, agents or brokers in the insurance industry, or careers in risk management within financial institutions.Explore Minor
Recent advances in artificial intelligence using big data are rapidly transforming many parts of our society, including the financial sector. These changes reach beyond simple automation of manual labor and have begun replacing mental tasks associated with white-collar jobs. To cope with these rapid changes in the financial sector, there is an increasing demand for students with the ability to harness these new data science and analytics tools for traditional corporate decisions. The Finance Digital Track fills this void and exposes students to various aspects of the digital economy through an integrated curriculum that combines regular business training and modern computing technology.Explore Digital Track
The Financial Markets Institute (FMI) provides comprehensive training to a select group of highly motivated finance and accounting students at Broad. Scholars are offered invaluable professional opportunities, such as co-managing a multi-million dollar investment fund and visiting financial services firms across the United States. Based on student preparation, the institute provides employers with the confidence that FMI scholars have the technical and soft skills necessary to make immediate contributions to their firms.
Kirt C. Butler, Multinational Finance, 6th edition (2016) by John Wiley & Sons, Inc.
“A Fresh Look at Cross-Border Valuation and FX Hedging Decisions” with T. O’Brien and G. Utete, Journal of Applied Finance (2013).
“The Relative Contribution of Conditional Mean and Volatility in Bivariate Returns to International Stock Market Indices” with K. Okada, Applied Financial Economics (2009).
“Higher-order terms in bivariate returns to international stock market indices” with K. Okada, Multinational Finance Journal (2008).
“Finance and the search for the ‘Big’ question in international business,” Academy of International Business (2006).
“Are the gains from international portfolio diversification exaggerated? The influence of downside risk in bear markets” with D.C. Joaquin, Journal of International Money and Finance (2002).
“Competitive investment decisions: A synthesis” with D.C. Joaquin, in Michael J. Brennan and Lenos Trigeorgis (eds.), Project Flexibility, Agency, and Product Market Competition: New Developments in the Theory and Application of Real Options Analysis (London: Oxford University Press), (2000).
“Improving analysts’ negative earnings forecasts” with H. Saraoglu, Financial Analysts Journal (1999).
“A note on political risk and the required return on foreign investment” with D.C. Joaquin, Journal of International Business Studies (1998).
“Stock returns in thinly traded markets” with R.M. Osborne, Financial Review (1998).
“International portfolio diversification and the magnitude of the market timer’s penalty” with D.L. Domian and R.R. Simonds, Journal of International Financial Management and Accounting (1995).
“Market response to earnings announcements: The effects of firm characteristics” with K. Han, Quarterly Journal of Business and Economics (1994).
“Long-run returns for stocks and bonds: Implications for retirement planning” with D.L. Domian, Financial Services Review (1992).
“Efficiency and inefficiency in thinly traded stock markets: Kuwait and Saudi Arabia” with S.K. Malaikah, Journal of Banking and Finance (1992).
“The forecast accuracy of individual analysts” with L.H.P. Lang, Journal of Accounting Research (1991).
“Risk, diversification, and the investment horizon” with D.L. Domian, Journal of Portfolio Management (1991).
“Nonsynchronous security trading and market index autocorrelation” with M.D. Atchison and R.R. Simonds, Journal of Finance (1987).
“Can Strong Creditors Inhibit Entrepreneurial Activity?” with R. Irani and K. Waldock, forthcoming Review of Financial Studies.
“Creditor Control Rights and Resource Allocation within Firms” with R. Irani and H. Le, Journal of Financial Economics, (2021).
“Creditor Rights, Technology Adoption, and Productivity: Plant-Level Evidence”, forthcoming Review of Financial Studies, (2020).
“Collateral Shocks and Corporate Employment” with R. Irani, Review of Finance (2020).
“Crowded out from the Beginning: Impact of Government Debt on Corporate Financing” with C. Akkoyun and C.M. James.
“The Achilles Heel of Reputable VCs” with R. Huang and N. Khanna.
“Do Short-Term Incentives Affect Long-Term Productivity?” with H. Almeida, R. Irani, S. Fos, and M. Kronlund.
“When Does Information Disclosure Help Innovation? Evidence from Blue Sky Laws” with C. Akkoyun.
“Fund Managers Under Pressure: The Rationale and Determinants of Secondary Buyouts” with S. Arcot, J. Gaspar, and U. Hege, Journal of Financial Economics (2015).
“Optimal Financial Contracting: Control Rights, Incentives and Entrepreneurship”, Strategic Change (2010).
“Privatization with Political Constraints and Agency Costs: Auctions versus Private Negotiations” with K. John and A. Ravid, Journal of Banking and Finance (2007).
“The Dynamics of Management-Shareholder Conflict”, Review of Financial Studies (1999).
“Why Firms Merge and Then Divest: A Theory of Financial Synergy” with A. Lynch, Journal of Business (1999).
“Optimal Financial Contracting: Debt versus Outside Equity”, Review of Financial Studies (1998).
“Callability or Covenant Defeasance in Corporate Bonds” joint with C. Bienz and K. Thorburn (NHH).
“Share the Best, Keep the Good: A Theory of Venture Capital Contracting and Syndication”, joint with M. Rezaei (UC-Berkeley).
“Defeasance of Control Rights”, with C. Bienz (NHH) and A. Faure-Grimaud (LSE).
“A Theory of Collective Decision-making in Corporate Boards”, with N. Khanna (MSU).
“Hand in Hand or Hand in Bind? A Theory of Later-Stage Syndication of Venture Capital Investments”, with K. Garrison and S. C. Myers (MIT).
“Optimal Financial Contracting: Strategic Default and Debt Maturity”.
“Doing Good When Doing Well: Evidence on Real Earnings Management” with G. William and J. Pierce, Review of Accounting Studies (2021).
“Network Effects in Corporate Financial Policies” with G. William, J. LeSage, and M. Zekhnini, Journal of Financial Economics (2021).
“Hiring Your Friends: Evidence from the Market for Financial Economists” with J. Pierce, Industrial and Labor Relations Review (2020).
“Managers with and without Style: Evidence Using Exogenous Variation” with C. E. Fee and J. R. Pierce, Review of Financial Studies (2013).
“Financial Strength and Product Market Competition: Evidence from Asbestos Litigation” with R. Sonti, Journal of Financial and Quantitative Analysis (2012).
“New Evidence of Measuring Financial Constraints: Moving Beyond the KZ Index” with J. Pierce, Review of Financial Studies (2010)
“Promotions, Turnover and Performance Evaluation: Evidence from the Careers of Division Managers” with M. S. Cichello, C. E. Fee, and R. Sonti, Accounting Review (2009).
“Investment, Financing Constraints and Internal Capital Markets: Evidence from the Advertising Expenditures of Multinational Firms” with C. E. Fee and J. Pierce, Review of Financial Studies (2009).
“Who Pays Attention to SEC Form 8-K?” with A. Ben-Rephael, Z. Da and P. Easton, forthcoming The Accounting Review.
“Public and Private Information: Firm Disclosure, SEC Letters, and the JOBS Act” with S. Agarwal and S. Gupta, forthcoming Quarterly Journal of Finance.
“Where the Heart Is: Information Production and the Home Bias” with J. Cornaggia and
K. Cornaggia, Management Science (2019).
“Information Consumption and Asset Pricing” A. Ben-Rephael, B. Carlin, and Z. Da, forthcoming Journal of Finance.
“Credit Ratings and the Cost of Municipal Financing” with J. Cornaggia and K.
Cornaggia, Review of Financial Studies (2018).
“Are Some Clients More Equal than Others? An Analysis of Asset Management Companies’ Execution Costs” with A. Ben-Rephael, Review of Finance (2018).
“It Depends on Where You Search: Institutional Investor Attention and Under-reaction to News” with A. Ben-Rephael and Z. Da, Review of Financial Studies (2017).
“Key Human Capital” with S. Yonker, Journal of Financial and Quantitative Analysis (2017).
“Does Common Analyst Coverage Explain Excess Comovement?”, Journal of Financial and
Quantitative Analysis (2016).
“How Quickly do Equity Prices Converge to Intrinsic Value?” with D. Capozza, Journal of
Investment Management (2010).
“Predictability in Equilibrium: The Price Dynamics of Real Estate Investment Trusts” with D. Capozza, Real Estate Economics (2007).
“Appraisal, Agency, and Atypicality: Evidence from Manufactured Homes” with D. Capozza and T. Thomson, Real Estate Economics (2005).
“Credit Rating Agency Fees: Pay to Play or Pay for Work?” with J. Cornaggia and K.
“Ownership and Governance Style: New Evidence from Nonfinancial Blockholders” with M. Schwartz-Ziv and J. Weston (2019).
“Government Spending and Local Demographics: Evidence from Moody’s Municipal Ratings
Recalibration” with J. Cornaggia, M. Gustafson and Z. Ye (2019).
“Is Financial News Politically Biased?” with E. Goldman and N. Gupta (2019).
“Information Consumption and Asset Pricing” with A. Ben-Rephael, B. Carlin, and Z. Da (2018).
“Indirect Costs of the JOBS Act: Disclosures, Information Asymmetry and Post-IPO Liquidity” with S. Gupta (2014).
“Tell It like It Is: Disclosed Risks and Factor Portfolios” (2014).
“Investment Based Valuation and Managerial Expectations” (2010).
“A Tangled Tale of Training and Talent: PhDs in Institutional Money Management” with C. Ranadeb, J. Pollet, and C. Trzcinka, Management Science (2020).
“Local Dividend Clienteles” with B. Becker and S. Weisbenner, Journal of Finance (2011).
“Individual Investor Mutual Fund Flows” with S. Weisbenner, Journal of Financial Economics (2009).
“Casual Community Efforts and Stock Market Participation” with J. Brown, P. Smith, and S. Weisbenner, Journal of Finance (2008).
“Information Diffusion Effects in Individual Investors’ Common Stock Purchases: Covet Thy Neighbors’ Investment Choices” with S. Weisbenner, Review of Financial Studies (2007).
“Tax-Motivated Trading by Individual Investors”, American Economic Review (2005).
“Empirical Determinants of Intertemporal Choice” with J. Brown and S. Weisbenner, Journal of Financial Economics.
“Strategic Performance Allocation in Institutional Asset Management Firms: Behold the Power of Stars and Dominant Clients” with R. Chaudhuri and C. Trzcinka, Journal of Finance.
“Does Mutual Fund Illiquidity Introduce Fragility into Asset Prices? Evidence from the Corporate Bond Market” with Y. Li, Z. Sun and A. Wang, forthcoming Journal of Financial Economics (2020).
“Pervasive Undereaction: Evidence from High-Frequency Data” with S. Li and H. Wang, forthcoming Journal of Financial Economics (2020).
“Dynamic Liquidity Management by Corporate Bond Mutual Funds” with D. Li and A. Wang, forthcoming Journal of Financial and Quantitative Analysis (2020).
“Reaching for Dividends” with Z. Sun, Journal of Monetary Economics (2020).
“Trade less and exit overcrowded markets: Lessons from international mutual funds” with T. Dyakov and M. Verbeek, Review of Finance (2019).
“Active Fundamental Performance” with L. Zheng, Review of Financial Studies (2018).
“Does Herding Behavior Reveal Skill? An Analysis of Mutual Fund Performance” with M. Verardo, Journal of Finance (2018).
“Investor Flows and Fragility in Corporate Bond Fund” with I. Goldstein and D. Ng, Journal of Financial Economics (2017).
“Tail Risk and Asset Prices” with B. Kelly, Review of Financial Studies (2014).
“Dispersion in Beliefs among Active Mutual Funds and the Cross-Section of Stock Returns” with Z. Sun, Journal of Financial Economics (2014).
“Information Content when Mutual Funds Deviate from Benchmarks” with Y. Wang and M. Verbeek, Management Science (2014).
“Tracking Biased Weights: Asset Pricing Implications of Value-Weighted Indexing” with D. Vayanos and L. Zheng.
“Predicting High-Frequency Industry Returns: Machine Learners Meet News Watcher” with S. Li and P. Yuan.
“The Cyber Risk Premium” with N. Khanna and Q. Yang.
“Investor Composition and Liquidity: An Analysis of Japanese Stocks” with S. Titman and T. Yamada.
“News and Corporate Bond Liquidity” with Z. Sung.
“Tail Risk and Hedge Fund Returns” with B. Kelly.
“Skill versus Reliability in Venture Capital” with R. Matthews, forthcoming Journal of Financial Economics (2021).
“Posturing and Holdup in Innovation” with R. Mathews, Review of Financial Studies (2016).
“Doing Battle with Short Sellers: The Conflicted Role of Block Holders” with R. Mathews, Journal of Financial Economics (2012).
“Can Herding Improve Investment Decisions?” with R. Mathews, Rand Journal of Economics (2011).
“Optimal Debt Contracts and Product Market Competition with Exit and Entry” with M. Schroder, Journal of Economic Theory (2010).
“Good IPOs Drive in Bad: Inelastic Banking Capacity in Hot Markets” with T. Noe and R. Sonti, Review of Financial Studies (2008).
“Pricing, Exit and Location Decisions of Firms: Evidence on the Role of Debt and Operating Efficiency” with S. Tice, Journal of Financial Economics (2005).
“Rewarding Disagreement for Optimal Decisions” with A. Peivandi and M. Schroder (2019).
“Crowding Out Skill in Venture Capital” with R. Matthews (2019).
“The Impermanence of Democracy: Intellectual Capital versus Capital Wealth” with T. Zhou (2019).
“The Evolution of Inversion Strategies: Role of Law Changes and Managerial Agency” with T. Zhou (2019).
“Making Boards More Effective: Independent Directors, Optimal Incentives, and Shareholder Say-on-Pay” with Z. Fluck (2014).
“Rational Price Manipulations By Stockholders” with J. Marietta-Westburg (2013).
“Are Most Democracies Temporal? Wealth Creation versus Wealth Appropriation” with Z. Fluck (2012).
“Concentration and Market Power: Is Big Necessarily Bad?” with S. Tice (2010).
“Does Trade Clustering Reduce Trading Costs? Evidence from Periodicity in Algorithmic Trading,” with J. Picard, forthcoming Financial Management.
“Is There a Risk Premium in the Stock Lending Market? Evidence from Equity Options,” with N. Pearson and J. Pollet, forthcoming Journal of Finance (2021).
“Informed Trading in the Stock Market and Option Price Discovery”, with P. Collin-Dufresne and V. Fos, forthcoming Journal of Financial and Quantitaive Analysis.
“Index Option Trading Activity and Market Returns” with T. Chordia, A. Kurov, and A. Subrahmanyam, forthcoming Management Science.
“Option Trading Costs Are Lower Than You Think” with N. Pearson, forthcoming Review of Financial Studies. Best Paper in Market Microstructure at the FMA 2017 Annual Meeting.
“Why Do Option Returns Change Sign from Day to Night?” with X. Ni, Journal of Financial Economics (2020).
“Order Flow and Expected Option Returns”, Journal of Finance (2016).
“Is There Price Discovery in Equity Options?” with N. Pearson and J.P. Broussard, Journal of Financial Economics (2013).
“How Do Informed Option Traders Trade? Option Trading Activity, News Releases, and Stock Return Predictability” with M. Cremers, A. Fodor, and D. Weinbaum, revise and resubmit at Management Science.
“Why Do Price and Volatility Information from the Options Market Predict Stock Returns?” with N. Pearson and J. Pollet.
“Should We Use Closing Prices? Institutional Price Pressure at the Close,” with V. Bogousslavsky. Runner up for the Best Paper in Market Microstructure at Financial Management Association 2020 Meeting. Media: Bloomberg. Video link.
“Making Better Use of Option Prices for Predicting Stock Returns,” with A. Vasquez and W. Wang.
“What Does Text Sentiment Really Measure? Evidence from Earnings Calls,” with T. Chebonenko and L. Gu.
“Private Information, Securities Lending, and Asset Prices” with M. Nezafat, forthcoming in Review of Financial Studies (2021).
“Short-Sale Constraints, Information Acquisition, and Asset Prices” with M. Nezafat and Q. Wang, Journal of Economic Theory (2017).
“Linked Recursive Preferences and Optimality” with S. Levental and S. Sinha, Mathematical Finance (2016).
“Monotonicity of the Stochastic Discount Factor and Expected Option Returns” with R. Chaudhuri, Review of Financial Studies (2015).
“A Simple Proof of Functional Itôs Lemma for Semimartingales with an Application” with S. Sinha and S. Levental, Statistics and Probability Letters (2013).
“Optimal Debt Contracts and Product Market Competition with Replacement” with N. Khanna, Journal of Economic Theory (2010).
“Downside Risk Timing by Mutual Funds” with A. Bodnaruk and B. Chokaev, The Review of Asset Pricing Studies (2019).
“Loss Averse Preferences, Performance, and Career Success of Institutional Investors” joint with A. Bodnaruk, Review of Financial Studies (2016).
“Captive Finance and Firm’s Competitiveness” joint with A. Bodnaruk and W. O’Brien, Journal of Corporate Finance (2016).
“Do Financial Experts Make Better Investment Decisions?” with A. Bodnaruk, Journal of Financial Intermediation (2015).
“Style representation and portfolio choice” joint with M. Massa and A. Stekhona, Journal of Financial Markets (2015).
“Alliances and Corporate Governance” joint with A. Bodnaruk and M. Massa, Journal of Financial Economics (2013).
“On the Real Effects of Bank Bailout: Micro-Evidence from Japan” with M. Giannetti, American Economic Journal: Macroeconomics (2013).
“Alliances and Corporate Governance” with A. Bodnaruk and M. Massa, Journal of Financial Economics (2013).
“Do Small Shareholders Count?” with M. Massa and E. Kandal, Journal of Financial Economics (2011).
“Is College a Focal Point of Investor Life” with M. Massa, Review of Finance (2011).
“Investment Banks as Insiders and the Market for Corporate Control” with A. Bodnaruk and M. Massa, Review of Financial Studies (2009).
“Family Feud: Succession Tournaments and Risk-Taking in Family Firms” with J. Lee and H. Shin, Asia-Pacific Journal of Financial Studies (2022)
“Fiscal Policy, Consumption Risk, and Stock Returns: Evidence from US States” with Z. Da and M. Warachka, Journal of Financial and Quantitative Analysis (2018).
“Industrial Electricity Usage and Stock Returns” with Z. Da and D. Huang, Journal of Financial and Quantitative Analysis (2017). William F. Sharpe Award for Scholarship in Financial Research: Best Paper in the Journal of Financial and Quantitative Analysis.
“Household Production and Asset Prices” with Z. Da and W. Yang, Management Science (2015).
“Lottery Tax Windfalls, State-Level Fiscal Policy, and Consumption” with Z. Da and M. Warachka, Economics Letters (2015).
“Risk Management and Firm Value: Evidence from Weather Derivatives” with F. Perez-Gonzalez, Journal of Finance (2013). Brattle Group Prize (First Prize): Best Corporate Finance Paper in the Journal of Finance.
“Are Mutual Funds Sitting Ducks?” with S. Shive, Journal of Financial Economics (2013).
“Negative Hedging: Performance Sensitive Debt and CEOs’ Equity Incentives” with A. Tchistyi and D. Yermack, Journal of Financial and Quantitative Analysis (2011).
“The Choice of Corporate Liquidity and Corporate Governance”, Review of Financial Studies (2009). JPMorgan Young Researcher Prize from the Review of Financial Studies.
“Matching Bankruptcy Laws to Legal Environments” with K. Ayotte, Journal of Law Economics and Organization (2009).
“A Wolf in Sheep’s Clothing: The Use of Ethics-Related Terms in 10-K Reports” with T. Loughran and B. McDonald, Journal of Business Ethics (2009).
“Financial Integration and Credit Democratization: Linking Banking Deregulation to Economic Growth” with E. Berger, A. Butler, and E. Hu, forthcoming Journal of Financial Intermediation.
“Industry Networks and the Geography of Firm Behavior,” with G. William and J. LeSage, forthcoming Management Science (2021).
“Network Effects in Corporate Financial Policies” with G. William, J. LeSage, and C. Hadlock, Journal of Financial Economics (2021).
“Safe Minus Risky: Do Investors Pay a Premium for Stocks that Hedge Stock Market Downturns?” with N. Kapadia, B. Ostdiek, and J. Weston, Journal of Financial and Quantitative Analysis (2019).
“Do Idiosyncratic Jumps Matter?” with N. Kapadia, Journal of Financial Economics (2019).
Members of the Finance Advisory Board contribute to the activities of the Department of Finance in many different ways, such as providing job opportunities (full-time positions and internships), getting involved with the team of students who manage the Student Investment Fund (SIF) and advising the department chair. There are also opportunities to mentor students.
The Finance Advisory Board meets twice annually (typically December and April), and part of each meeting is devoted to discussing the Student Investment Fund’s performance with the student managers and the rationale behind their buys and sells. The Finance Advisory Board’s job is to ask challenging questions and provide advice and insights to advance the student managers’ knowledge.
The Center for Venture Capital, Private Equity and Entrepreneurial Finance (CVCPEEF) integrates financial thinking and strategic decision-making with innovation and entrepreneurship via research and education across the university, and in the venture capital (VC) and private equity (PE) community around the world.
The Financial Analysis Lab provides the opportunity for hands-on training in financial modeling and valuation. The lab’s hardware and software not only emulate a real trading room, but also enable a dynamic instructional setting. The lab is equipped with dual-screen computers and a number of Bloomberg terminals.Lab Hours and Contact
The Broad College of Business is a CFA University Affiliation Program Partner of the CFA Institute, a global membership organization that awards the Chartered Financial Analyst® (CFA®) designation.
The CFA Program sets a standard for developing the skills, standards, competence, and integrity of financial analysts, portfolio managers, investment advisors, and other investment professionals worldwide. It is widely considered the investment profession’s most rigorous credentialing program.See Program Benefits
Full-Time MBA students and undergraduates manage the Student Investment Fund (SIF) as members of the college’s Security Analysis class (FI 457/FI 857). Under the instruction of Stephen Schiestel and using the tools of the Financial Analysis Laboratory, the students master the essentials of portfolio management, stock selection and stock performance evaluation. They continuously monitor the fund and ensure that its stated security selection discipline is maintained.Learn about the SIF