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CEO Confidence and Stock Returns

Roger Best ()
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Roger Best: University of Central Missouri

Working Papers from University of Central Missouri, Department of Economics & Finance

Abstract: In this research, I explore whether announcements of CEO confidence contain new information for investors. Information asymmetry implies that insiders such as Chief Executive Officers should have better information regarding the firm prospects than the average stock market participant. Thus, announcements of CEO perceptions may provide valuable insights to investors. Utilizing The Conference Board quarterly measures of CEO confidence and CEO six-month economic outlook, I find significant correlations between changes in CEO outlook and the announcement date returns on three major stock market indexes. These correlations are larger and more significant for indexes of smaller companies, implying announcements of CEO confidence provide unique and valuable information to stock markets.

Keywords: CEO Confidence; Consumer Confidence; Stock Returns; Asymmetric Information (search for similar items in EconPapers)
Pages: 6 pages
Date: 2008-08, Revised 2008-08
New Economics Papers: this item is included in nep-bec
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