Essays on the Linkages between Financial Markets, and Risk Asymmetries

The purpose of this project is to enhance our understanding primarily concerning the second moment characteristics of the Finnish stock market. As a result of financial deregulation the influence of international factors have changed over time. We investigate the impact of foreign shocks, and domestic as well as foreign variables on domestic returns and volatilities. Further, besides exploring interactions and transmissions between markets, we investigate volatility asymmetries. This is based on a well-known result that negative shocks tend to increase volatilities by more than positive shocks of equal magnitude do.