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Investments and Portfolio Management CP June 15, 2020 Total Marks 10 Name: CH Rahmooz Jamshaid Roll Number: 20201240003

The Friday effect refers to the phenomenon where stock returns on Mondays are typically lower than the preceding Friday. Studies show the pure Monday trading effect is actually positive after adjusting for the weekend effect. The Monday effect varies by month as well, being positive on average in January but negative for other months. The weekend period presents more risk since the market is closed for around 60 hours, during which any disasters could occur and impact stock prices when trading resumes.

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31 views1 page

Investments and Portfolio Management CP June 15, 2020 Total Marks 10 Name: CH Rahmooz Jamshaid Roll Number: 20201240003

The Friday effect refers to the phenomenon where stock returns on Mondays are typically lower than the preceding Friday. Studies show the pure Monday trading effect is actually positive after adjusting for the weekend effect. The Monday effect varies by month as well, being positive on average in January but negative for other months. The weekend period presents more risk since the market is closed for around 60 hours, during which any disasters could occur and impact stock prices when trading resumes.

Uploaded by

Sidra Jamshaid Ch
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Investments and Portfolio Management CP June 15, 2020

Total Marks 10
Name: Ch Rahmooz Jamshaid Roll Number: 20201240003

Explain the concept of Friday effect?


The Friday effect is a phenomenon in financial markets in which stock returns on Monday is particularly
lower than those of the immediately proceeding Friday. After the adjustment of the weekend effect the
pure Monday trading effect was positive. The studies also shows that the Monday effect was on average
positive in january and negative for all other months.
In weekends the supply should be enhance so that when on Monday they buy that and increase the
demand of that stock then price should be high when companies increases dividends stock price increases.
This shows that company should be grow in few next year as its eps increases.
The weekend affects are more risky because it takes about 60 hours to reopen market in that 60 hours any
disaster can take place in the country or on the company that can effects the price of the stock.

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