Does education affect how well students forecast the market?

Authors

  • Alexander Jr. Department of Finance, Clemson University, 314 Sirrine Hall, Clemson, SC 29634-1323, USA
  • Robert B. McElreath Department of Finance, Clemson University, 314 Sirrine Hall, Clemson, SC 29634-1323, USA

DOI:

https://doi.org/10.1016/S1057-0810(00)00043-3

Keywords:

Education, Expectations, Market forecasts

Abstract

This study examines the results of a student stock market forecasting project used in our basic and advanced investments classes. Students fail to outperform a random walk model over the entire period, but do perform well in some subperiods. Students receiving an above average grade in the basic investments class provide more accurate forecasts than all other groups of students. Further, poorer performing students tend to be more pessimistic in their expectations of the market. The results suggest that education improves the forecasting ability of students. © 1999 Elsevier Science Inc. All rights reserved.

Downloads

Published

1999-12-30

How to Cite

Alexander, J. C., & McElreath, R. B. (1999). Does education affect how well students forecast the market?. Financial Services Review: The Journal of Individual Financial Management, 8(4), 253–260. https://doi.org/10.1016/S1057-0810(00)00043-3

Issue

Vol. 8 No. 4 (1999): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1999 JAI Press Inc.

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Author(s) retain copyright and grant the Journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial 4.0 International License that allows to share the work with an acknowledgment of the work's authorship and initial publication in this Journal.

This license allows the author to remix, tweak, and build upon the original work non-commercially. The new work(s) must be non-commercial and acknowledge the original work.