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Contemporary terrorism: risk perception in the London options market
1Department of Accounting and Finance, University of Limerick, Ireland. john.garvey@ul.ie
Abstract:
Previous studies have a demonstrated a linkage between terrorist attacks and the operation of financial markets. This article focuses on terrorist events carried out over the last five years and examines how they have been perceived among participants on the London financial market. Data from the London options market suggest a high degree of sensitivity to these events. We argue that this sensitivity reveals a vulnerability in the financial markets should the recent trends in terrorist activity continue.
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