10 Questions
What is an event study in finance used to test?
The change in stock or bond prices around specific events
What is the Efficient Market Hypothesis (EMH) related to?
The incorporation of new information into stock prices
What does it mean for a market to be efficient?
Prices always fully reflect available and relevant information
What does the weak form of Market Efficiency (ME) test for?
Return predictability based on past prices and technical analysis
What does the semi-strong form of Market Efficiency (ME) indicate?
Prices reflect all published information, not just past information
What are some examples of events that are studied in event studies in finance?
Corporate earnings announcements, macro-economic news, natural disasters
What is the Efficient Market Hypothesis (EMH) and what does it hypothesize about stock prices?
The hypothesis that in an efficient market, stock prices fully reflect all available and relevant information, and that stock prices change only when new information arrives.
What are the two aspects of efficiency referred to in the Efficient Market Hypothesis?
Speed and quality
What does the weak form of Market Efficiency (ME) test for?
The weak form tests whether prices reflect all information contained in the record of past prices, including technical and fundamental variables.
What does the semi-strong form of Market Efficiency (ME) indicate?
The semi-strong form indicates that prices reflect not only past information but also all other published information.
Test your knowledge of event studies in finance with this quiz. Explore the impact of corporate earnings announcements, macro-economic news, and natural disasters on stock and bond prices. Sharpen your understanding of empirical methods in finance with this Msc Finance Lecture 1 from Tilburg University.
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