Abstract:
Appropriate information has an important implication for the investment
analysis and management of portfolio. Various signaling devices are used to convey
this information to potential investors. Categorization of shares is one of them. It
aims at providing the investors’ information with company performance in order that
it helps the investors a lot in choosing companies before making decision. So it
argues that the categorization influences price behavior of shares. This study actually
concentrates on finding out whether categorization of securities has any impact on
price behavior of shares. In assessing the impact, a non-parametric statistical test
(Chi-square test) and ANOVA technique have been carried out on some selected
securities traded in DSE. The study reveals that categorization does not influence the
price behavior of shares. It is hoped that this study will draw attention for further
study to improve the concept of ‘Categorization’ as a signaling device.
