Behavioral Effects in Forecasting Company Future Return

Student: Zakareishvili Avtandil

Educational Programme: Economics (Bachelor)

Year of Graduation: 2019

The aim of this study is to analyze whether there are any behavioral effects in the stock market and if so, to analyze their significance on the company’s future return forecast. Return forecasting model is suggested in order to test these effects. The assessment of company’s intrinsic value is established as the controlling variable since the market abides by fundamental laws of price formation. The figures of annual financial reports of index S&P500 companies were used as dataset. Moreover, an experiment has been conducted in order to analyze the influence of decision making in asset trading on company’s future return. Its results are analyzed in terms of investors’ behavior.

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