THE EVALUATION OF STOCK MARKET EFFICIENCY AFTER THE SEPTEMBER 11TH TERRORIST ATTACKS

This case study will address what happens to companies, their stocks, and the efficiency of the stock market when an unpredicted disaster occurs and causes the market to shutdown. Market efficiency was tested by analyzing risk adjusted stock price returns before and after the September 11th (9/11) t...

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Bibliographic Details
Published inAllied Academies International Conference. Academy of Accounting and Financial Studies. Proceedings Vol. 22; no. 1; pp. 1 - 5
Main Authors Bencick, Lauren, Bacon, Frank W
Format Journal Article
LanguageEnglish
Published Arden Jordan Whitney Enterprises, Inc 01.01.2017
Subjects
Air travel
Airlines
Case studies
Corporate profits
Dependent variables
Efficiency
Efficient markets
Hypotheses
Independent variables
Insider trading
Insurance companies
Insurance policies
Investments
Life insurance
Prices
Regression analysis
Securities markets
September 11 terrorist attacks-2001
Stock exchanges
Stock prices
Studies
Terrorism
United States > US
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Summary:This case study will address what happens to companies, their stocks, and the efficiency of the stock market when an unpredicted disaster occurs and causes the market to shutdown. Market efficiency was tested by analyzing risk adjusted stock price returns before and after the September 11th (9/11) terrorist attacks on a sample of ten firms, ranging from insurance firms to travel companies to weapon manufacturers. Stock prices can be affected by internal controls or management decisions specific to individual firms. Stock prices can also be affected by an abundance of other market-wide factors, including one single event. Thus, stock prices are strong indicators of the impact of an event's overall efficiency; however, stock prices cannot be the only factor taken into consideration when evaluating an event. This case study will evaluate the stock market before and after the attacks, taking into consideration the large payout by insurance companies as a consequence of the event, as well as the effects on airline travel.