Research topics

I have to do a research papper for my finance seminar, and i want to know if you guys could give me ideas of some Research topics that could help me out, Right now im reading this research papper called “The effect of derivatives on risk and firm value”

What’s the area of Finance you are interested in?

I like derivatives but also corporate finance.

Asset pricing modesl? An easy way to answer your question would be to look through several issues of the the journal of Finance.

Sign-up on ssrn and use the advanced search. Check for papers on subjects you’re interested in written in the last year with a lot of downloads.

The thing to remember about asset pricing models is that they don’t (directly) tell you what the price of an asset is. You’d think it would, given that’s what they’re called. But they don’t.

I spent a lot of time confused about where the asset price actually is in an asset pricing model.

They just tell you the discount rate to use to price an asset (which happens to be the expected growth rate for something with a particular set of risks/characteristicss).

Also, what level of class are you doing? If a seminar can be as broad as to include corporate finance and derivatives, it is probably an undergraduate seminar. A graduate seminar would usually already be restricted to either corpfin or derivatives.

Not that there’s anything wrong with being in an undergraduate seminar. We’ve all been (or still are) undergraduates at one point…

…but telling an undergrad to go search the Journal of Finance for a research topic may be a bit too ambitious.


Here’s my suggestion:

Look at the titles of articles in the Journal of Finance, Journal of Portfolio Management, Journal of Investment Managment, and the like. If there is any hint of interest in one of those topics, then go read the abstract. If it is still interesting, then read the introduction and conclusion of the articles.

Importantly, don’t worry if you can understand the articles fully or not (though you should at least understand what it is they are studying, even if you get lost at some point in the article).

THEN, go to your professor and say “I was looking at X, Y, and Z and found these things interesting: how can I turn one of those topics into a DOABLE research paper.”

If your professor is any good, they’ll suggest a line of study that fits your abilities, and - importantly - give you some hints about how deep to go into the topic.

The key issue is that if it’s cutting-edge enough to make it into one of those journals, it is very likely too challenging for an undergrad (or even an early graduate student) to improve upon in a class paper; your professor can help you figure out how big a piece to bite off without giving yourself indigestion.

(If I’m wrong in my assumption and you are in a graduate program, then this advice still works, but you should be able to understand more of the journal articles before getting lost. The “read a few abstracts then go talk to your professor” is still useful advice).

Here is an example of an asset pricing model that uses garbage as a measure of consumption:

bchadwick is correct asking about the level of class. I took an advanced PhD class on research with professor Fama and most students in class were interested in topics of the caliber similar to the caliber of the Journal of Finance though clearly the final papers weren’t as advanced the ones in the Journal of Finance. I did empirical work and wrote a paper on persistence in performance of CTAs using Fama-McBeth regression and quintile methodology. Several students wrote a paper that tried to explain the hml factor as the premium of financial distress, another student wrote a paper about key factors in explaining returns of corporate bonds, another student wrote a paper about impact of dispersion of analysts’ forecasts on future earnings, etc. There were lots of very diverse ideas covered.