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RESEARCH NOTES AND COMMUNICATIONS ESTIMATING RISK--RETURN RELATIONSHIPS: AN ANALYSIS OF MEASURES.
- Source :
- Strategic Management Journal (John Wiley & Sons, Inc.) - 1980 to 2009; Jul1993, Vol. 14 Issue 5, p387-396, 10p
- Publication Year :
- 1993
-
Abstract
- We show that the risk-return paradox can be partly explained by the choice of accounting risk and return measures. Returns computed with equity or assets from End-of-Period (EOP) annual reports produce negative risk-return associations, while measures calculated using Beginning-of-Period (BOP) equity or assets yield more positive relationships. The likelihood of reporting negative relationships using EOP methods is accentuated by dividing samples at median returns. Below-median firms suffer losses and may appear to have lower and more variable returns than above-median firms, simply because of EOP methods. Our results show that mean and variance measures are unstable and risk-return relationships vary inversely the number of firms reporting mean losses. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 01432095
- Volume :
- 14
- Issue :
- 5
- Database :
- Complementary Index
- Journal :
- Strategic Management Journal (John Wiley & Sons, Inc.) - 1980 to 2009
- Publication Type :
- Academic Journal
- Accession number :
- 12493220
- Full Text :
- https://doi.org/10.1002/smj.4250140506