# ZHANG, Chu
**Source**: https://bm.hkust.edu.hk/faculty/zhang-chu
**Parent**: https://bm.hkust.edu.hk/bizinsight/bizstudies
ZHANG, Chu
Chair Professor
Department of Finance
[View Profile](https://fina.hkust.edu.hk/faculty/directory/czhang)
### Recent Activities
[ZHANG, Chu](https://bm.hkust.edu.hk/faculty/zhang-chu)
[A Novel Model of Pricing Errors](https://bm.hkust.edu.hk/bizinsight/2025/12/novel-model-pricing-errors)
[Predictive Modeling](https://bm.hkust.edu.hk/bizinsight/tag/predictive-modeling)
[Investment Performance](https://bm.hkust.edu.hk/bizinsight/tag/investment-performance)
[Financial Innovation](https://bm.hkust.edu.hk/bizinsight/tag/financial-innovation)
An important challenge for investors is understanding why some stocks and investments perform better than others. Traditionally, financial experts have predicted how much return (or profit) an investor can expect based on a company’s size, its earnings, or overall economic conditions. With important implications for investors and other finance professionals
...
[Read More](https://bm.hkust.edu.hk/bizinsight/2025/12/novel-model-pricing-errors)
[ [BizStudies](https://bm.hkust.edu.hk/bizinsight/bizstudies "BizStudies") ]
[Read Full Paper](https://pubsonline.informs.org/doi/epdf/10.1287/mnsc.2023.4768)
WANG, Zhen
[ZHANG, Chu](https://bm.hkust.edu.hk/faculty/zhang-chu)
[Solving the Investment–Cash Flow Sensitivity Puzzle](https://bm.hkust.edu.hk/bizinsight/2023/02/solving-investment-cash-flow-sensitivity-puzzle)
[Investment Performance](https://bm.hkust.edu.hk/bizinsight/tag/investment-performance)
[Financial Strategy](https://bm.hkust.edu.hk/bizinsight/tag/financial-strategy)
Historically, businesses with the largest cash flows and capital reserves were the biggest investors—but this is no longer the case. Economists have long struggled to explain why the relationship between corporate investment and cash flow has weakened and even disappeared in the last few decades. Thanks to the pioneering work of HKUST’s Chu Zhang and co
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[Read More](https://bm.hkust.edu.hk/bizinsight/2023/02/solving-investment-cash-flow-sensitivity-puzzle)
[ [BizStudies](https://bm.hkust.edu.hk/bizinsight/bizstudies "BizStudies") ]
[Read Full Paper](https://www.cambridge.org/core/services/aop-cambridge-core/content/view/9A8A23EC185EDF8D68B958A119CB60E8/S0022109020000617a.pdf/why_did_the_investmentcash_flow_sensitivity_decline_over_time.pdf)
SUN, Chengzhu
WANG, Shujing
[ZHANG, Chu](https://bm.hkust.edu.hk/faculty/zhang-chu)
[Do Payout Policies Affect Credit Risk?](https://bm.hkust.edu.hk/bizinsight/2022/11/do-payout-policies-affect-credit-risk)
[Credit](https://bm.hkust.edu.hk/bizinsight/tag/credit)
[Financial Risk](https://bm.hkust.edu.hk/bizinsight/tag/financial-risk)
[Firm Behavior](https://bm.hkust.edu.hk/bizinsight/tag/firm-behavior)
Firms return capital to their equity investors through their “payout policy.” In the case of “dividend payouts,” money is usually transferred to shareholders’ accounts at regular intervals. Despite the tax disadvantage, dividend payouts remain economically significant and resilient. However, we do not yet know how dividend payout raises and cuts affect
...
[Read More](https://bm.hkust.edu.hk/bizinsight/2022/11/do-payout-policies-affect-credit-risk)
[ [BizStudies](https://bm.hkust.edu.hk/bizinsight/bizstudies "BizStudies") ]
[Read Full Paper](https://pubsonline.informs.org/doi/epdf/10.1287/mnsc.2020.3753)
[ZHANG, Chu](https://bm.hkust.edu.hk/faculty/zhang-chu)
LI, Gang
[The Importance of Counterparty Credit Risk in Financial Markets](https://bm.hkust.edu.hk/bizinsight/2021/04/importance-counterparty-credit-risk-financial-markets)
[Stock Market](https://bm.hkust.edu.hk/bizinsight/tag/stock-market)
[Financial Products](https://bm.hkust.edu.hk/bizinsight/tag/financial-products)
[Derivative Warrants](https://bm.hkust.edu.hk/bizinsight/tag/derivative-warrants)
Counterparty credit risk (CCR) refers to the risk that a counterparty will not pay up as obligated in a contract. Under such circumstances, an economic loss would occur if the transaction with the counterparty has a positive economic value at the time of default. In recent years, counterparty credit risk has become a prominent risk for market participants
...
[Read More](https://bm.hkust.edu.hk/bizinsight/2021/04/importance-counterparty-credit-risk-financial-markets)
[ [BizStudies](https://bm.hkust.edu.hk/bizinsight/bizstudies "BizStudies") ]
[ZHANG, Chu](https://bm.hkust.edu.hk/faculty/zhang-chu)
[Research Responsibilities](https://bm.hkust.edu.hk/bizinsight/2021/01/research-responsibilities)
[ESG](https://bm.hkust.edu.hk/bizinsight/tag/esg)
[Green Finance](https://bm.hkust.edu.hk/bizinsight/tag/green-finance)
[Climate Risk](https://bm.hkust.edu.hk/bizinsight/tag/climate-risk)
ESG, or Environmental, Social, and Governance, has become a hot topic recently. In this article I summarize what I have learned about environmental risks from various sources, and provide my thoughts on academic research focusing on green finance. These thoughts reflect my limited exposure to the subject.
Environmental Risks
Environmental disasters can
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[Read More](https://bm.hkust.edu.hk/bizinsight/2021/01/research-responsibilities)
[ [Green Finance](https://bm.hkust.edu.hk/bizinsight/bizthemes/green-finance "Green Finance") ]
[ZHANG, Chu](https://bm.hkust.edu.hk/faculty/zhang-chu)
[Hong Kong Derivative Warrants: the Case of Counterparty Risk](https://bm.hkust.edu.hk/bizinsight/2020/03/hong-kong-derivative-warrants-case-counterparty-risk)
[Lunch Webinar](https://bm.hkust.edu.hk/bizinsight/tag/lunch-webinar)
[Derivative Warrants](https://bm.hkust.edu.hk/bizinsight/tag/derivative-warrants)
[Financial Risk](https://bm.hkust.edu.hk/bizinsight/tag/financial-risk)
In this presentation, Prof Chu Zhang will explain in layman’s language a recently published research paper regarding Hong Kong’s derivative warrant market. The paper addresses the questions of whether counterparty risk is priced in derivatives in general. The research results show counterparty credit risk matters for derivative pricing.
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[Read More](https://bm.hkust.edu.hk/bizinsight/2020/03/hong-kong-derivative-warrants-case-counterparty-risk)
[ [BizTalks](https://bm.hkust.edu.hk/bizinsight/biztalks "BizTalks") ]
[Watch Video](https://video.ust.hk/Watch.aspx?Video=DF11B678BC4E8CDE&embed=Y)
LI, Gang
[ZHANG, Chu](https://bm.hkust.edu.hk/faculty/zhang-chu)
[How Liquidity Lifts the Price of Derivatives](https://bm.hkust.edu.hk/bizinsight/2010/07/how-liquidity-lifts-price-derivatives)
Derivative warrants typically cost more than otherwise identical options, a situation that on the surface seems to defy logic. However, they are preferred by traders who trade frequently so there is something else at play besides price. Chu Zhang of HKUST and co-author Gang Li investigated and found some distinct, non-price advantages. Derivative warrants
...
[Read More](https://bm.hkust.edu.hk/bizinsight/2010/07/how-liquidity-lifts-price-derivatives)
[ [BizStudies](https://bm.hkust.edu.hk/bizinsight/bizstudies "BizStudies") ]
[Read Full Paper](https://www.cambridge.org/core/services/aop-cambridge-core/content/view/3D013C819513740333C6E23E9EB4D000/S0022109010000670a.pdf/why-are-derivative-warrants-more-expensive-than-options-an-empirical-study.pdf)