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Finance - Dissertation Example
Finance & Accounting
Pages 48 (12048 words)
Contents Contents 2 Abstract 3 1.0Introduction 4 2.0Literature Review 8 3.0Methodology 15 Table2: Abnormal Gain on purchase transactions 24 Abstract Insider trading has always been in question among the regulatory bodies all across the globe. Although anybody from inside the corporations can commit insider trading, however directors have always remained the pioneer of doing so…
These sorts of scandals caused several studies in which scholars and financial analyst tried to identify the content of information that the directors usually possess through which the directors were able to generate higher profits in the stock market. This paper clarifies whether directors outperform their business markets whenever they trade, when they buy, or when they sell. The research paper also establishes the characteristics in transaction level, the firm level, or the director-level, which determine the directors’ trade profitability. Based on the same, hardly any existing studies provide adequate empirical evidence of percentage gain by directors generated by directors in their process of purchasing or selling company shares. The paper also provides that directors are better selling off shares, through insider trading, rather than purchasing them at comparatively lower prices. For testing, data was extracted from the New York Stock and NASDAQ of fifty randomly selected companies. The insider trading information of these companies for the financial period January 1, 2009 until June 30, 2012 was analyzed. ...
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