Got a tricky question? Receive an answer from students like you! Try us!

Calendar Anomalies: Definition and Background Information - Research Paper Example

Only on StudentShare
Research Paper
Finance & Accounting
Pages 12 (3012 words)


Calendar Anomalies: Definition and Background Information
Calendar anomalies, or seasonal effects, as applied to stock markets can be defined as “the tendency of financial assets returns to display systematic patterns at certain times of the day, week, month or year” (Brooks 2008, p. 454). …

Extract of sample
Calendar Anomalies: Definition and Background Information

454). Although it was only recently that substantial studies were devoted to look seriously and closely into this phenomenon, calendar anomalies have always been regarded as part of the market folklore. As early as the 1930s, a few studies had already broached the idea of seasonal effects (Jacobs & Levy, p. 135).
Recently, a spate of studies looked particularly into this phenomenon despite the admitted dominance of Professor Farma’s (1970) efficient market hypothesis (EMH hereafter), which is said to largely underpin stock market and securities returns rationale. The EMH is “A market in which prices always ‘fully reflect’ available information” (cited Scheurle, p. 19). Thus, while the information-reliant EMH makes stock markets largely unpredictable, calendar anomalies results in the opposite. Moreover, they breach the EMH principle that stock returns should be random and unpredictable because they allow market participants to anticipate potential rise and fall of the market and use that knowledge to make profits (Gao and Kling 2005, pp. 75-76)
In the United States, for example, the day-of-the week and January effects have been widely studied, as a consequence of which a large amount of evidence has been found that supports their validity (Lean et al, 2007, p. 2). ...
Download paper
Not exactly what you need?

Related Essays

Madoff LLC Fraud. Background of the Company
The company handled approximately 50 million shares per day. The main activity of the company has been to handle the orders that the online brokers belonging to a few of the biggest US companies used to make such as the Citigroup Inc. and General Electric. It is evident that the company has been the foremost to mechanize market-making. In this type of dealing, the dealer tends to incessantly buy the stocks and sell them as well. Madoff’s firm has also been the biggest to offer “payment for order flow” (Glovin & Scheer, 2011). Bernard Madoff never revealed his financial statements and…
12 pages (3012 words)
Exposure to Currency Risk: Definition and Measurement
8 pages (2008 words)
General Background for business plan
She considered the idea that construction litigation is in need of forensic experts in terms of mitigating claims for damages and other construction management services, and from there she founded CSI. The Owner & Management Team: Lily Iftner CSI is currently owned by Lily Iftner, a licensed civil engineer. She is also the brainchild of the business whose background includes a four-year experience in a construction site wherein she served as an insurance investigator. With motivation, she started her own business wherein she becomes one of the expert witnesses in terms of structure damages,…
3 pages (753 words)
information managment
The article after providing a brief background of the Cloud Computing technology, focuses on its evolutionary path. “This paper examines cloud computing in the context of other major changes in Information Technology (IT) and explores the revolutionary transformations and challenges it brings to IT management.” (Bento and Bento 39). The authors divide the evolution into six phases starting from 1970’s, when the IT systems in organizations got centralized, particularly regarding the financial and accounting information. They further delve into these phases by discussing how advancement in…
5 pages (1255 words)
To What Extent are Stock Market Anomalies Evidence of Market Inefficiency?
Eugene Fama has taken the specific asset pricing model such as the APT (Asset Pricing Theory and the CAPM (Capital Asset Prising Model) as the standard paradigm. Since the stock prices of different firm over the markets is different, i.e. the market value for the riskier stocks are low providing higher rate of return and vice-versa but in a cross section market the inverse will be applicable. Thus based on the evaluation made by Fama we can analyse the factors responsible for the stock markets anomalies resulting from market inefficiency (Keim & Ziemba, 2000, pp.92-94) Momentum and…
8 pages (2008 words)
The assignment - Background information - You are the financial director of a large, ficticious company called Manac plc, which
The target profit of the company is not being achieved and as a result of that it is impacting the entire organization. The company has also adopted several cost cutting methods, which impacted the production and reduced competitive advantage of the firm. The report will mainly focus on three areas of strategic management accounting. In the first part, it will mainly emphasize on the models and concepts on pricing decision. In the second part, the study will primarily focus on role of standard costing and variance analysis in management accounting. The third part is about uncovering the pros…
10 pages (2510 words)
Internal Audit Deparment Background description about TJX Company.
Similarly, the audit department is involved in making optimal recommendations on the improvements that should be established to the senior management and audit committee. The audit director of TJX reports to John Caban in updating him on the auditing process and plans that need to be implemented (, 2). John Caban is supposed to report to the CFO of TJX company who is known as Scott Goldenburg. In addition, Caban is responsible of approving the audit plan prepared by the audit department. Similarly, the chief audit chief is responsible of updating the audit department of the organization…
4 pages (1004 words)