An event study describes a technique of empirical financial research that
A)enables an observer to assess the impact of a particular event on a firm's risk.
B)enables an observer to assess the impact of a particular event on a firm's standard deviation.
C)enables an observer to assess the impact of a particular event on a firm's stock price.
D)enables an observer to assess the impact of a firm's return on risk of the market.

Question

Quizplus · Accepted Answer

An event study is a technique used to assess the impact of a particular event on a firm's stock price. It involves analyzing the movement of the stock price before and after the event to determine whether the event had a significant impact on the company's value. This technique is commonly used in financial research to understand the impact of events such as mergers, acquisitions, earnings announcements, or other significant company news. The study can provide valuable insights into how markets perceive the news and can be used to inform investment decisions.

An Event Study Describes a Technique of Empirical Financial Research