Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Michael Gelman

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© 2022 Vasu Rai


This paper investigates the predictive power of Cash Flows with regards to stock returns. I use U.S. equity data from 2002-2021 to create a linear model. I then look at how the magnitude of the coefficient changes in varying volatility regimes and after the 2008 financial crisis. I find that a similar increase in cash flow increases the stock return by a greater amount in low volatility regimes than in higher volatility regimes. I also find that there is not statistically significant difference before and after the global financial crisis.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.