Bali Receives Distinguished Achievement in Research Award
Turan Bali, Robert S. Parker Chair of Business Administration at Georgetown’s McDonough School of Business, was awarded the 2017 Distinguished Achievement in Research Award by Georgetown University on Nov. 7. The award recognizes a single distinguished achievement in scholarship and research.
Bali received the award along with Adam Lifshey, professor in the Department of Spanish and Portuguese. Each recipient receives a $10,000 cash prize, award, and recognition at a university-wide ceremony.
One of the world’s leading scholars in the field of asset pricing, Bali was recognized for his 2014 reception of the Jack Treynor Prize. The prestigious prize recognizes superior academic working papers with potential applications in the fields of investment management and financial markets. It is sponsored by the Q-Group (The Institute for Quantitative Research in Finance). Bali received the Jack Treynor Prize for his paper “Betting Against Beta or Demand for Lottery,” forthcoming in the Journal of Financial and Quantitative Analysis.
The paper demonstrates that the disproportionate pressure on the price of “high-beta” stocks, known as the beta anomaly, is largely attributed to demand for “lottery-like stocks,” independent from underlying firm characteristics and risk. In this paper, Bali and his co-authors also show that the lottery premium is stronger for stocks held and traded by individual investors, not institutional investors such as mutual funds and pension funds.
“This is an important contribution to understanding the role of ‘gambling’ in the stock market and preferences of retail investors in setting asset prices,” Bali said.
Bali expressed gratitude and humility at receiving the recognition from the university. “I am very pleased, honored, and humbled to receive this incredible award at the university level,” Bali said. “Given that my work is valued by the university, I am even more motivated to improve my good work.”
Bali’s next research pursuit is a direct continuation of “Betting Against Beta or Demand for Lottery.” His interest is in the corporate bond market, and he plans to “develop common risk factors in the corporate bond market that will be crucial for institutional investors to accurately determine the risk-adjusted performance of their bond portfolios.”
Bali also sees room to create a cohesive blend of research and classroom teaching at Georgetown McDonough.
“I truly enjoy contributing to Georgetown in terms of research, but I also believe that ‘excellence in research to impact practice’ should be incorporated into our teaching practices so that we can produce creative, well-rounded future business leaders who can think out of the box,” he said.