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New Evidence on the Value Additivity Principle
Published online by Cambridge University Press: 06 April 2009
Abstract
This paper tests the Value Additivity Principle (VAP) of financial assets with the pricing of Standard Oil securities in 1912. The results are somewhat mixed: the VAP does not generally describe the daily prices of equivalent Standard Oil portfolios, but it accurately describes their average market values; and the portfolio values display convergent adjustment behavior that tends to equalize them quite rapidly. On balance, these findings are consistent with the VAP.
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- Copyright © School of Business Administration, University of Washington 1987
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