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Title Stock market reaction to product announcements and its implication toward market efficiency
Author DeLaney, William Johnston
Department Department of Economics and Business
Institution Colorado College
Degree Type bachelor
Degree Name Bachelor of Arts
Type of Resource text
Digital Origin reformatted digital
Date Accepted 2007
Date Digitized 2009
Abstract The purpose of this study is to find out if the stock market is efficient or inefficient with regard to product announcements. The Efficient Market Hypothesis (EMH), which states that all available information is "fully" represented in a securities price, has been a widely debated subject within the financial world and has yet to be disproved. This study includes an examination of whether or not stock prices overreact to product announcements creating abnormal returns. Two methods are applied to calculate daily abnormal stock returns and then observed over multiple days to ensure that the full announcement effect was captured. Of the 276 product announcements examined, results indicate that stock prices do overreact to product announcements, thus refuting the widely accepted EMH.
Keywords Efficient market hypothesis
Product announcements
Overreaction
Rights Statement Copyright restrictions apply. Contact the author for permission to publish.
Extent 53 p. : ill. ; 29 cm.
Note (thesis) Senior Thesis - Colorado College
Note (bibliography) Includes bibliography
Publisher Colorado College
Place of Publication Colorado Springs, Colorado
Language eng
OCLC Identifier 159958223
Handle http://hdl.handle.net/10176/coccc:2954
 
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Created: Wed, 05 May 2010, 14:50:29 MST by Cindy Tappan . Detailed History