Assistant Professor of Finance
- Tyler Muir's Website
Professor Muir’s research focuses on empirical asset pricing and financial intermediaries. While financial theory suggests that stock returns are compensation for risk, a measure of fundamental risk that justifies returns has been elusive. For example, “momentum” stocks earn an average of 12% annually, with seemingly no connection to risk. While traditionally researchers have focused on measuring risk as the risks faced by the average investor, Professor Muir focuses on measuring the risks faced by financial institutions who trade more frequently and in more markets. His single measure of riskiness explains a large amount of stock returns that were previously considered “anomalies.” His measure of risk — the leverage of investment banks — uses insights from theories on the importance of financial institutions for asset prices. The recent failure and deleveraging of such institutions, such as Lehman Brothers, and the financial and economic crisis that followed, highlights the role of financial intermediaries in asset markets.