Force-majeure events and financial market’s behavior

Plastun, Alex and Plastun, Vyacheslav (2013): Force-majeure events and financial market’s behavior. Published in: Socioekonomicke a humanitni studie , Vol. 3, No. 2 (2013): pp. 43-59.

Abstract

Efficient market hypothesis fails from time to time. There are many reasons why it happens. We will try to concentrate on one of them – force-majeure events – situations when something important happens unexpectedly. In this case market simply can’t absorb information in one moment. So for some period of time it becomes inefficient and stays inefficient until new information will not be included by the market. Such situations give us possibility to predict the market’s behavior. This is our intuitive assumption. To confirm or refuse it we will analyze the reaction of financial markets to the biggest force-majeure events during last 20 years. Also we will try to develop a trading strategy based on financial market’s reaction to force- majeure events.

• Item Type: MPRA Paper
• Language: English
• Keywords: financial market, force-majeure event, financial market’s efficiency, events study
• Subjects: G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency ; Event Studies ; Insider Trading; G - Financial Economics > G1 - General Financial Markets > G17 - Financial Forecasting and Simulation

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