Analyzes the effects of newsweek green rankings

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Reference no: EM132138704

Graph an event study relationship.

The event in consideration here is:

"Environmental performance, being green, clean-tech, corporate sustainability, and many other "green" issues are on the forefront of the current economic discussion. To help better understand the consequences of firm environmental behavior it will be useful to examine the relationship between corporate environmental decisions and stock market reaction. Therefore, this paper analyzes the effects of the 2009 Newsweek Green Rankings on firms' financial performance, as measured by stock market returns.

An event study examines some variable or measure before and after an event occurs. Therefore, the effect of the event is captured by the change of the variable. Since it is known that the event occurs before the reaction a strong case for causality is present. This paper uses stock prices and abnormal returns of companies to measure the stock market reaction to the Newsweek Rankings. The stock prices are the changing variables that helps explain more about the Newsweek Rankings and how investors react to their release.

This study finds evidence that the stock market react negatively to the Newsweek Rankings as a whole. This could mean that the stock market does not like hearing about environmental news. The data also suggests that investors react negatively to news that a company is more environmentally friendly than previously thought. This potentially means that investors place a negative value on environmentally conscious corporations."

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The assignment was about study of the cause and effect relationship. The effect of the green ranking 2009 has to be studied as per the requirement of the assignment. The index prices before and after the date of ranking has been taken and accordingly, the analysis has been done for one year before the ranking and one year after the ranking.

Reference no: EM132138704

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urv2138704

11/21/2018 10:07:32 PM

Payment has been successfully made. If you have any questions pls let me know. I have a question about the graph. Is it supposed to be a line or something? The professor needs a handwriting version for this question. Can you please ask tutor to get another version for it? The Graph is supposed to make up a line graph, can u ask tutor about it? Thank you, I appreciate it. Very well done, the work appropriate and as per the requirements. I have less knowledge about such technical assignment so I am really thankful for your help.

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