This study documents a pervasive inverse relationship between asset growth rates and bond performance among non-investment and low-investment grade bonds. We argue such inverse relation holds ex ante considering a high growth rate in firm total assets results in growth in tangible assets and lowers bond default probabilities. Our empirical finding supports this hypothesis. Tangible asset growth of poorly rated bonds is negatively associated with contemporaneous bond performance and expected default probability. The finding is robust to different economic conditions and investment sentiments.

Efficient portfolio is a portfolio that yields maximum expected return given a level of risk or has minimum level of risk given a level of expected return.However,the optimal portfolios seem not being as efficient as intended.Especially during financial crisis period.optimal portfolio is not an optimal investment as it does not yield maximum return given a specific level of risk,vice and versa.One possible explanion for an unimpressive performance of the seemingly efficient portfolio is incorrectness in parameter estimates called"estimation risk in parameter estimates".Five different estimating strategies are employed to explore ex post portfolio performance when estimation risk is incorporated.These strategies are traditional mean-variance(EV),Adjusted Beta(AB) approach,Capital Asset Pricing Model(CAPM),Single Index Model(SIM), and Single Index Model incorporating shrikage Bayesian factor namely Bayesian Single Index Model(BSIM).Among the five alternative strategies,shrinkage estimators incorporating the single index model outperforms other traditional portfolio selection strategies.Allowing for asset mispricing and applying Bayesian shrinkage adjusted factor to each asset's alpha,a single factor namely excess market return is adequate in alleviating estimation uncertainty. JEL：G320

In a real options and game-theoretic framework, this paper examines the optimal R&D investment timing of an incumbent under uncertainty, which faces the threat of preemption by a potential entrant. We incorporate incomplete information into the model by assuming that the incumbent does not know the entrant’s investment timing but know its distribution. We find that incomplete information reduces the erosion of waiting option value by the competition, and therefore waiting is still valuable even in the presence of preemption and competition. The entrant's hazard rate has the impact on the incumbent's optimal investment timing: the more the hazard rate is, the earlier the incumbent invests.

We consider the optimal intertemporal consumption and investment policy of a CARA investor who faces ¯xed and/or proportional transaction costs when trading multiple stocks. We show that when the stock returns are independent, the optimal investment policy in each stock is for the investor to keep the dollar amount invested in the stock between two constant levels and upon reaching one of these thresholds, to trade to the corresponding optimal targets. An extensive analysis of the optimal policy is conducted. This analysis reveals the signi¯cant relevance of transaction costs to the predictability and trading volume literature. We also obtain some seemingly counterintuitive results. For example, conditional on positive investment in a stock, as transaction costs increase, the average amount invested in the stock increases.