Event Study

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DEFINITION of 'Event Study'

An empirical study performed on a security that has experienced a significant catalyst occurrence, and has subsequently changed dramatically in value as a result of that catalyst. The event can have either a positive or negative effect on the value of the security.

INVESTOPEDIA EXPLAINS 'Event Study'

Examples of events that influence the value of a security will be a result of the company filing for Chapter 11 bankruptcy protection, the announcement of a merger, or from the result of the company defaulting on its debt obligations.

Event studies can reveal important information about how a security is likely to react to a given event, and can help predict how other securities are likely to react to different events.

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