The purpose of this study is to measure the message terror organizations hope to convey using the financial markets as a proxy of measurement to determine patterns within the marketplace and the effects on the terrorists’ ability to deliver a desired message due to the increased use of digital devices and access to instantaneous news, seen over the past decade. Using death count, geographic location, and event type, this study identified 109 attacks between 1985 and 2015 to be analyzed against 5 market indices and 5 securities. Measuring the effects within a 10-day sample window from the time of the attack (+ or - 5 days) using average abnormal returns, standard deviation, Sharpe Ratio and the initial reactions in the market place as a percentage of total attacks, the effects on average abnormal returns on the market proxies were measured on three levels; The entire sample period from 1985 to 2015; the first half of the sample period 1985-1999; and the second half of the sample period 2000-2015. Analyzing trends in abnormal returns and standard deviation, the results of the study were inconclusive.
Bachelor Science in Business Administration (B.S.B.A.)
College of Business Administration
Orlando (Main) Campus
Roland, Nicholas, "Informational Efficiency and the Reaction to Terrorism: A Financial Perspective" (2016). Honors Undergraduate Theses. 232.
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