• norsk
    • English
  • English 
    • norsk
    • English
  • Login
View Item 
  •   Home
  • Fakultet for samfunnsvitenskap (SAM)
  • SAM - Master Theses
  • SAM - Master i Økonomi og administrasjon – siviløkonom
  • View Item
  •   Home
  • Fakultet for samfunnsvitenskap (SAM)
  • SAM - Master Theses
  • SAM - Master i Økonomi og administrasjon – siviløkonom
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

How are Financial Markets affected by the Election of Donald Trump? An Event Study on the U.S Stock Market’s Response to Changes in Political Leadership

Andersen, Sofie Lødeng; Ødegaard, Line Christina Kragebøl
Master thesis
Published version
Thumbnail
View/Open
Andersen_Oedegaard.pdf (1.511Mb)
URI
https://hdl.handle.net/10642/7027
Date
2018
Metadata
Show full item record
Collections
  • SAM - Master i Økonomi og administrasjon – siviløkonom [308]
Abstract
Changes in political leadership influence the economic policy of government, which directly impacts on

firms. Accordingly, the risk-adjusted market return alters, as investors reallocate their investments. We apply

common financial methodologies in investigating how the election of Donald Trump affects the U.S stock

market. Utilizing the Fama and French three-factor model, and the Jensen’s alpha approach, we find no

evidence of abnormal returns from Trump’s presidency. However, we find that a portfolio consisting of the

health care sector, the defense sector, and the flight-travel sector generates negative abnormal returns

during the Bush – and Obama presidential periods. Correspondingly, we reject that the election of Donald

Trump negatively affects the combined portfolio, as the portfolio performs much worse with Bush and

Obama as presidents. Furthermore, we find evidence that the health care sector, the defense sector, and the

flight-travel sector possess a sufficiently higher risk-adjusted performance with Trump as president,

compared to Bush and Obama based on Sharpe ratio estimation. Controlling for political party, the results

do not support that Trump’s effect on the U.S. stock market is related to his republican policies. We conclude

that the election of Donald Trump increases the performance for the sector portfolios compared to the Bush

– and Obama presidential periods.
Description
Master i økonomi og administrasjon
Publisher
OsloMet - Oslo Metropolitan University

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit
 

 

Browse

ArchiveCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsDocument TypesJournalsThis CollectionBy Issue DateAuthorsTitlesSubjectsDocument TypesJournals

My Account

Login

Statistics

View Usage Statistics

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit