This study discusses the similarities and differences between Ponzi and Pyramid schemes and the unparalleled example of Albania. In particular, this document treats the creation and collapse of a financial scheme in Albania, which had some characteristics of both Ponzi and Pyramid schemes, based on their definitions and examples. The study points out the factors that caused the creation of some financial intermediary entities in Albania, which resulted to be a massive fraudulent scheme; how they were developed; and the consequences for the country in terms of economic, political and social environment after they collapsed. The Case of Albania is an unprecedented case of a fraudulent financial scheme due to the magnitude of the population involved (57%) relative to the country's economic size (liabilities of the scheme reached the equivalent of 51% of GDP); the chaos and the near civil war state as a result of the population's violent protest; the state's measures taken by the governments after the ruin of the economy; the quick recovery; and the process of reducing the impacts of the financial scheme collapse in the long run.
This paper studies the question that credit rating changes of industrial companies have information content important to equity investors. The paper hypothesizes that both credit increases and credit decreases should yield statistically significant results. However, research shows that on the credit rating change announcement day, only companies being downgraded experience statistically significant movement in their stock price. The cumulative abnormal returns on stock prices for companies that were upgraded and for companies that were downgraded were statistically insignificant.
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