The Interactions among the U.S. Stock Market, Political Prediction Market, and the 2016 Presidential Election

Sammanfattning: The purpose of this study is to examine the influence of the 2016 general election on performance of the U.S. stock market. The thesis looks at the presidential election from two aspects: first, whether the wisdom of the crowds illustrated in prediction market can be taken as a reliable tool to predict the stock market performance. Records from Iowa Electronic Market was applied together with stock market data; second, compare and contrast the predicted results with the actual behavior of the stock market from an industrial perspective: how the stock market reacts under the expectation of future policies and whether such reactions go in line with Trump's campaign policies before, etc.