Qianhe Zhang


Major: Finance

Advisor: Prof. Elena Goldman

Document Type



The main purpose of my thesis is to determine the current influence of credit rating downgrades and upgrades made by Moody's on the U.S. equity market. Previous literature has already talked about the effect of credit ratings on stock or bond price, however, my paper is different from previous works. I will focus on a single nationally recognized credit rating organization; I will talk about the both downgrade effect and the upgrade effect; I will do a case study of the credit rating effect on Ford, IBM, and Boeing. The results indicates that overall, Moody’s rating announcements have an important effect on the stock abnormal returns as expected with more significant and sizable effect for upgrades based on the case study of three companies. In the future research it would be interesting to collect more data for companies in various industries and see if the effect is different.