What Drives Stock Return Ignorance?

Prof. Yulia Merkoulova was our first speaker for this year’s Financial Literacy Colloquia, presenting her paper “What Drives Stock Return Ignorance?” 

Yulia's main research interests are in corporate finance, behavioral finance, and derivatives. The Stanford University community came together to hear more about her study on stock return ignorance. Her hypothesis explores three possible reasons: 

• Lack of information / inability to retain information
• Mismatch between ability to process complex information and complexity of the problem
• Rational inattention where perceived costs outweigh perceived benefits 

Together, we heard more about the experiment, from memory to statistical reasoning. Thank you, Yulia, who traveled all the way from Australia to be with us.