| Summary: | 碩士 === 朝陽科技大學 === 財務金融系碩士班 === 96 === This paper employs event study method to probe into how the
interest rate adjustments by the U.S.''s Federal Reserve Bank and Taiwan''s
Central Bank affect the abnormal returns for Taiwan''s five major stock
categories. The results are as follows:
1. When the U.S. Federal Reserve and Taiwan''s Central Bank
announced interest rate cuts, the electronics, steel, plastics/chemicals,
and securities sectors all experienced positive abnormal returns,
while financial holding stocks did not exhibit substantial abnormal
return.
2. When the U.S. Federal Reserve announced interest rate hikes, most
studied stocks in all five major stock categories experienced negative
abnormal return. The financial-holding stocks'' reaction to the U.S.
Federal Reserve''s interest rate increase was especially pronounced
3. When the Taiwan Central Bank announced interest rate hikes, the
five major categories exhibited abnormal return, yet some stocks''
abnormal returns were positive, which was likely due to the stocks''
recovering after market''s over-reaction to the earlier U.S. Federal
Reserve rate hike. Moreover, the number of times this reaction
occurred was less than the number of times U.S. Federal Reserve
adjusted the rate; this was probably because some of the reaction
took place before U.S. Federal Reserve increased interest rate.
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