Department of Finance

Kaustia and Puttonen won Emerald Management Reviews Citation of Excellence award


Markku Kaustia, Heidi Laukkanen and Vesa Puttonen won the Emerald Management Reviews Citation of Excellence award for their article "Should good stocks have high prices or high returns?" published in Financial Analysts Journal in 2009.

Emerald Management Reviews Citation of Excellence is awarded to the 50 best articles published in 2009 and covered by the Emerald Management Reviews. Emerald Management Reviews is an abstracting and indexing database that covers every article in the top 400 business and management journals world-wide such as American Economic Review, Harvard Business Review, Journal of Finance, Journal of Marketing, Strategic Management Journal and Administrative Science Quarterly. The top 50 articles were selected from 15,000 articles reviewed by Emerald throughout 2009.

For more information please contact Markku Kaustia


Using a design involving a between-subjects experimental manipulation, this study surveyed 742 Finnish financial advisers about requiring a risk premium in one mode and about expected returns in the other mode. Company-level risk factors (e.g., leverage) caused an increased return requirement in the first mode but led to lower return expectations in the second mode. Sensitivity to the form of the question revealed an inconsistency in the advisers’ perception of risk and return. Advisers seemed to associate safe stocks with relatively lower discount rates (and thus higher valuations), but also with higher return expectations. This inconsistency may contribute to the overpricing and subsequent inferior performance of glamour stocks. Giving consistent advice is a necessary condition for providing valuable client service.


Kaustia, Markku, Heidi Laukkanen, and Vesa Puttonen, 2009, "Should good stocks have high prices or high returns?", Financial Analysts Journal 65, No. 3 (May/June), 55-62.


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