Is Positive Sentiment in Corporate Annual Reports Informative?

Recent advances in machine learning and natural language processing (NLP) enable machines to better understand human languages. E-mail systems now routinely warn us when an email we receive may be a spam, suggest a quick response to an email, correct our grammatical errors, and suggest words or an entire sentence to an email we are writing. The main advantage machines have over humans is that they can quickly process huge amounts of data. In a new paper, we examine the extent to which machines can help us understand the functioning of financial markets.

Public companies provide detailed information about their … Read more