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New Public Offerings, Information, and Investor Rationality: The Case of Publicly Offered Commodity Funds

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Author Info
Elton, Edwin J
Gruber, Martin J
Rentzler, Joel
Abstract

Publicly-traded commodity funds have been poor investment vehicles, yet new funds are a fast-growing part of the investment scene. In this article, the authors show that the information provided to investors is significantly biased upward and that true performance cannot be determined by the information most investors see. Thus, investment in commodity funds, given the information set, is rational. While the authors limit the study to commodity funds, the same should hold for other limited partnerships, such as real estate, oil, and gas. Copyright 1989 by the University of Chicago.

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File URL: http://www.jstor.org/fcgi-bin/jstor/listjournal.fcg/00219398/.61-.67
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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Business.

Volume (Year): 62 (1989)
Issue (Month): 1 (January)
Pages: 1-15
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Handle: RePEc:ucp:jnlbus:v:62:y:1989:i:1:p:1-15

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  1. Francois Degeorge & Richard Zeckhauser, 1991. "Information Handling and Firm Performance: Evidence from Reverse LBOs," NBER Working Papers 3798, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Michael Bleaney & R. Todd Smith, . "Risk, Managerial Skill and Closed-End Fund Discounts," Discussion Papers 08/10, University of Nottingham, School of Economics. [Downloadable!]
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