Event Study

AAA

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.

RELATED TERMS
  1. Feasibility Study

    An analysis of the ability to complete a project successfully, ...
  2. Cramming

    An emergency test-preparation strategy that involves an attempt ...
  3. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  4. Catalyst

    Something that initiates or causes an important event to happen. ...
  5. Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form ...
  6. Bankruptcy Risk

    The possibility that a company will be unable to meet its debt ...
Related Articles
  1. The Uncertainty Of Economics: Exploring ...
    Economics

    The Uncertainty Of Economics: Exploring ...

  2. Forecast The FX Market With The COT ...
    Options & Futures

    Forecast The FX Market With The COT ...

  3. A Case Study: Earnings Manipulation ...
    Investing

    A Case Study: Earnings Manipulation ...

  4. What Merger And Acquisition Firms Do
    Investing Basics

    What Merger And Acquisition Firms Do

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center