The Excess and Insufficient Reaction of the Stock Market Response to News

Student: Eyvazova Narmina

Supervisor: Sergey M. Menshikov

Educational Programme: Stock Market and Investment (Master)

Final Grade: 7

Year of Graduation: 2016

In recent years researchers have identified financial phenomena efficient market theory could not explain (EMH, Efficient Market Hypothesis). Such phenomena include effects of market "overreaction" and "underreaction" based on cognitive psychology studies. Both effects are the most important challenges to market efficiency, which allowed lying down the foundation for behavioral finance. Throughout the diploma paper both "overreaction" and "underreaction" effects as reaction to news announcement will be revealed. The study will be conducted in the Russian stock market.

Full text (added May 15, 2016)

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