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Do Brokerage Firm Clients Have an Information Advantage?

Do Brokerage Firm Clients Have an Information Advantage?

Research analysts at investment banks, like Goldman Sachs and Merrill Lynch, spend considerable time working on research reports. Most of them release their findings to their customers outside market hours. The clients, including investment firms and mutual funds, will come to the office in the morning, sift through the information and decide whether or not it is important enough information to warrant a trade. In his paper titled The Value of Client Access to Analyst Recommendations, T. Clifton Green, assistant professor of finance at Emory University’s Goizueta Business School asks, and subsequently answers, the question: Does this short-lived informational advantage provide clients with investment value?

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