Equity Term Structures without Dividend Strips Data
We use a large cross section of equity returns to estimate a rich affine model of equity prices, dividends, returns, and their dynamics. Our model prices dividend strips of the market and equity portfolios without using strips data in the estimation. Yet model-implied equity yields closely match yields on traded strips. Our model extends equity term-structure data over time (to the 1970s) and across maturities, and generates term structures for various equity portfolios.
Smith Expert Focuses Maryland Officials on Climate-Driven Insurance Crisis
Risk expert Clifford Rossi testified before Maryland lawmakers on January 21, 2025, warning that extreme climate events, like the recent LA fires, are overwhelming insurance companies. He proposed creating a federally chartered National Hazard Insurance Corporation (NHIC) to address the crisis.
For Professional Investment Fund Managers, “Going Long” is a Winning Strategy
Russ Wermers, Smith professor and director of Smith’s Center for Financial Policy, introduces the Holding Horizon (H-H) measure, linking mutual fund managers' long-term stock holdings to superior risk-adjusted returns. The research highlights that skilled long-horizon managers outperform, offering insights for individual investors and retirement plans.
Risk Matters: Killer Bees, Black Swans and Gray Rhinos
Risk events often deemed "unprecedented" are typically extreme iterations of past occurrences, argues Clifford Rossi, Professor of the Practice and Director of the Smith Enterprise Risk Consortium. Comparing these to “Killer Bees,” he emphasizes proactive risk management, urging organizations to anticipate and mitigate low-probability, high-severity scenarios with robust strategies and resources.
Study Examines Economic Consequences for Pretrial-Detainee Households
Pretrial detention often imposes severe financial burdens on defendants and their households, increasing bankruptcy, foreclosure and insolvency rates, especially during housing downturns. Research by Pablo Slutzky, assistant professor of finance at the University of Maryland’s Smith School, highlights the systemic link between monetary bail, poverty cycles and criminal justice reform.
Risk Matters: The Case for Enterprise Risk Management in Higher Education
Poor risk management practices eventually come back to haunt those organizations that fail to take a broad and proactive view at managing risk.
Smith Professor Michael Faulkender Nominated for Deputy US Treasury Secretary
Michael Faulkender, Dean’s Professor of Finance at the Smith School, has been nominated as U.S. Deputy Secretary of the Treasury. A former Treasury economist, he played a pivotal role in shaping COVID-19 relief efforts and is a leading voice in financial policy research. His nomination awaits Senate confirmation.
Smith Undergrads Honored as Philip Merrill Presidential Scholars
Three Smith seniors were honored as Philip Merrill Presidential Scholars, recognizing mentorship’s impact. At a Nov. 1 ceremony, Abigail Manga, Adelina Seck, and Grayson Vintz celebrated their achievements alongside K-12 and Smith mentors, highlighting the program’s legacy of excellence.
Risk Matters: Where Models and Cognitive Bias Collide
Risk decisions often falter due to cognitive biases, underdeveloped decision-making processes, and overreliance on models. Clifford Rossi argues that robust frameworks and balanced decision structures are essential to navigate uncertainty effectively and mitigate poor risk outcomes.