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Two new papers have been published this month that deployed the artificial intelligence chatbot in market-relevant tasks — one in deciphering whether Federal Reserve statements were hawkish or dovish, and one in determining whether headlines were good or bad for a stock.
The first wave of academic research applying the artificial intelligence bot to finance reveals it can also tell whether the Federal Reserve is being hawkish.
The first wave of academic research applying ChatGPT to the world of finance is arriving - and judging by early results, the hype of the past few months is justified.
Research showed ChatGPT can pull off similar tasks without even being specifically trained
This paper studies a portfolio choice problem of a utility-maximizing investor with return predictability and small liquidity costs. By adopting a logarithmic-return assumption, our asymptotic expansion around small liquidity costs provides the closed-form expressions for the first-order approximation of the value function and the associated almost-optimal trading strategy. The almost-optimal trading strategy indicates that the investor should trade toward the optimal frictionless portfolio, instead of directly adopting it. The approximated value function effectively captures the utility loss ...