Okke

General remarks#

This paragraph:

Not only does the alphabet bias have different impacts on different investors, it could also impact stocks differently. Chebbi & Jebnoun (2016) point out that higher trading activity leads to a lower price volatility in large and medium size firms but to a higher volatility in the smaller stocks.

.. is slightly misplaced in the introduction. It calls for many questions already, that might be posed and answered in the literature review and methodology, and it should contain an explain for why higher trading activity leads to more (or less) volatility, and how that relates to risk.

  • How does the endowment effect relate to alphabet bias? (p.6)

  • 2.2: Started with empirical evidence, but what about theory?

  • It would be good to have a short introduction in each paragraph to explain the function of that paragraph in the entire literature review/thesis

  • I like the basic link: Alphabet Bias $\rightarrow$ Inexperience $\rightarrow$ Herd/Trend-Chasing Behavior $\rightarrow$ Excess Volatility, but it should be spelled out clearer

    • Should be structured more clearly and integrated with previous sections (I think)

  • Purpose of 2.5?

  • In general, I think you need less sections, as there is only 1 basic hypothesis

  • The contribution should be explained in the introduction

Methodology#

  • Basic approach: you compute indirectly the excess volatility of the stock based on an asset pricing model

    • CAPM
    • FF 3 factor

  • Also: Crash risk

  • Maybe remove many of the equations that do not add that much information

  • Independent and Control variables are nicely explained

Talking points#

Do I need to discuss what measures of risk I want to use in the lit review or in the methodology?

  • I think it’s best to do that in the methodology

de voorlopige resultaten en hoe ik hier mee om kan gaan/uit kan schrijven.