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Further Evidence on the Firm-Size Relation and Stock Market Responses to Changes in Federal Reserve Margin Levels

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Abstract

The virtually monotonic firm-size/price-reactions observed following changes in U.S. Federal Reserve market margin requirements over the post-1962 period provide dramatic new evidence in support of the hypothesis that changes in margin levels are associated with changes in security return behavior. Variance tests of the 1970 and 1971 margin decreases also produce evidence consistent with this hypothesis.

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Authors and Affiliations

  1. Department of Finance, Insurance, and Real Estate, The University of Memphis, Memphis, TN, 38152, U.S.A

    Stephen W. Pruitt (Associate Professor of Finance)

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  1. Stephen W. Pruitt
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Pruitt, S.W. Further Evidence on the Firm-Size Relation and Stock Market Responses to Changes in Federal Reserve Margin Levels. Small Business Economics 9, 301–307 (1997). https://doi.org/10.1023/A:1007926027703

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  • DOI: https://doi.org/10.1023/A:1007926027703

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