Dutch Journal of Finance and Management
Research Article
2016, 1(1), Article No: 39

Looking for Psychological Barriers in nine European Stock Market Indices

Published online: 08 Aug 2016
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Abstract

In this paper we examine nine European stock market indices for indication of psychological barriers at round numbers. We test for uniformity in the trailing digits of the indices and use regression and GARCH analysis to assess the differential impact of being above or below a possible barrier. Despite having rejected uniformity for all data series, we only found significant psychological barriers in the stock markets of Germany, Finland and the Netherlands. Moreover, we document that the relationship between risk and return tends to be weaker at the proximity of round numbers which poses a challenge to the traditional equilibrium models.

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AMA 10th edition
In-text citation: (1), (2), (3), etc.
Reference: Lobão J, Pereira C. Looking for Psychological Barriers in nine European Stock Market Indices. Dutch Journal of Finance and Management. 2016;1(1), 39. https://doi.org/10.20897/lectito.201639
APA 6th edition
In-text citation: (Lobão & Pereira, 2016)
Reference: Lobão, J., & Pereira, C. (2016). Looking for Psychological Barriers in nine European Stock Market Indices. Dutch Journal of Finance and Management, 1(1), 39. https://doi.org/10.20897/lectito.201639
Chicago
In-text citation: (Lobão and Pereira, 2016)
Reference: Lobão, Júlio, and Cristiano Pereira. "Looking for Psychological Barriers in nine European Stock Market Indices". Dutch Journal of Finance and Management 2016 1 no. 1 (2016): 39. https://doi.org/10.20897/lectito.201639
Harvard
In-text citation: (Lobão and Pereira, 2016)
Reference: Lobão, J., and Pereira, C. (2016). Looking for Psychological Barriers in nine European Stock Market Indices. Dutch Journal of Finance and Management, 1(1), 39. https://doi.org/10.20897/lectito.201639
MLA
In-text citation: (Lobão and Pereira, 2016)
Reference: Lobão, Júlio et al. "Looking for Psychological Barriers in nine European Stock Market Indices". Dutch Journal of Finance and Management, vol. 1, no. 1, 2016, 39. https://doi.org/10.20897/lectito.201639
Vancouver
In-text citation: (1), (2), (3), etc.
Reference: Lobão J, Pereira C. Looking for Psychological Barriers in nine European Stock Market Indices. Dutch Journal of Finance and Management. 2016;1(1):39. https://doi.org/10.20897/lectito.201639
Related Subjects
Finance & Management
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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