Empirical accounting research provides surprisingly little evidence on whether accountingearnings numbers capture cross-sectional differences in risk that are associated withcross-sectional differences in share prices. We address two questions regarding therisk-relevance of accounting numbers: (1) Are accounting-related risk measures (i.e., thesystematic risk and total volatility in a firm’s time-series of residual return on equity) ...
Empirical accounting research provides surprisingly little evidence on whether accountingearnings numbers capture cross-sectional differences in risk that are associated withcross-sectional differences in share prices. We address two questions regarding therisk-relevance of accounting numbers: (1) Are accounting-related risk measures (i.e., thesystematic risk and total volatility in a firm’s time-series of residual return on equity) ...