Performing an event study An exercise for finance students

This exercise helps instructors teach students how to perform a simple event study. The study tests to see if stocks earn abnormal returns when added to the S&P 500. Students select a random sample of stocks that were added to the index between January 2000 and July 2015. The accompanying spread...

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Bibliographic Details
Published inThe Journal of economic education Vol. 48; no. 3; pp. 206 - 215
Main Authors Reese, William A, Robins, Russell P
Format Journal Article
LanguageEnglish
Published Washington Routledge 01.01.2017
Taylor & Francis, Ltd
Taylor & Francis Inc
Subjects
Behavioral Objectives
Business Administration Education
Class Activities
Data Collection
ECONOMIC INSTRUCTION
Erfahrungslernen
Event study
experiential learning
Finance Occupations
Graphs
Group Discussion
Learning Activities
Money Management
S&P 500
Statistical Significance
Students
Teaching Methods
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Summary:This exercise helps instructors teach students how to perform a simple event study. The study tests to see if stocks earn abnormal returns when added to the S&P 500. Students select a random sample of stocks that were added to the index between January 2000 and July 2015. The accompanying spreadsheet calculates cumulative abnormal returns and cumulative abnormal trading volume and plots them in separate graphs. Students are asked to analyze the data and draw conclusions. Through this exercise, students learn how to conduct an event study and determine if a statistically significant event has occurred.
ISSN:0022-0485
2152-4068
DOI:10.1080/00220485.2017.1320603