Date of Award

8-2018

Degree Type

Creative Project

Degree Name

Master of Science (MS)

Department

Economics and Finance

Committee Chair(s)

Tyler Brough

Committee

Tyler Brough

Committee

Ben Blau

Committee

Paul Fjeldsted

Abstract

My research focuses on stock returns around term elections. I will be looking at the 50 most held stocks of congressmen, and taking the returns of these stocks against the market average during election season. I examine if there are Cumulative Abnormal Returns (CARs) that can be realized as a result of information about the elections. I want to find any possible trading strategy that investors could use to obtain returns that are in excess of the market average. I am attempting to discover how the market behaves when election season is occurring. This information could prove to be very crucial in helping to understand behavior of stock returns. Although I am only analyzing elections that occur every two years, if the returns prove to be large enough, then it would prove to be very worthwhile to employ a strategy to capture the gains. With the unpredictability of the stock market, any predictive behavior helps to further understand what could happen. I obtained my portfolio of stocks from the 50 most held stocks by congressmen. These data are open source. The data available is from 2005-2015. From this data I will be analyzing the elections in the years 2006, 2008, 2010, 2012, and 2014.

After obtaining these results, I will then run a regression on the political party that owns each stock against the CAR. By doing so I hope to find out if stocks held by the winning party exhibit abnormal behavior. This implies the following question: Do congressmen have an influence upon the stock values of companies they have stock in? I expect the results to show significant returns for the stocks held by congressmen. I believe that the stocks held by the winning party will exhibit high returns.

Download

Included in

Finance Commons

Share

COinS

Copyright for this work is retained by the student. If you have any questions regarding the inclusion of this work in the Digital Commons, please email us at .