Volume : 3, Issue : 5, MAY 2017

MARKET REACTION TO DEMONETIZATION: AN EMPIRICAL STUDY USING EVENT STUDY TECHNIQUE

Shailesh Kumar Jain, Chandra Shekhar, Sunil Deshpande

Abstract

Demonetization as an event has shed its gloomy shadow on the booming tourism and hospitality industry in India. The event study methodology is used in finance, and refers to the situation where research seeks to determine the market reaction is considered to investigate the impact of an event on a specific dependent variable. Announcement of Demonetization is event studies, and its’ impact on stock price of the hospitality industries. While employing event studies to measure the event impact, it may be found that the techniques to underperform the market. From this, the researcher can be inferring the significance of the event. The basic and indispensable assumption followed in the event study methodology is that the market is always efficient. The impact of an event will be reflected immediately in the stock prices in the efficient markets.

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