Abstract:This study examines investors' hedging behaviours in the credit default swap (CDS) market in response to the managerial tone of the Management Discussion and Analysis section in 10‐K/Q flings. Utilising CDS positions data derived from the Depository Trust & Clearing Corporation, we first document that managerial tone is negatively associated with CDS positions. We further find that such an effect is stronger for investors with less reliable alternative information channels and for firms with greater defaul… Show more
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