The Effect of Elections on the Performance of Tehran Stock Exchange

The paper orientation is the effect of political elections on the performance of Tehran Stock Exchange. Using daily stock index data, the effect of political elections on the performance of Stock Exchange by experimental study in the period (2006-2010) are searched. This paper studies the relationship between elections and the stock market using ordinary least squares (OLS) and GARCH (1, 1) focus on the pre-election and pro-election in the past five years.The results indicate that there is no significant effect of the election on the returns during the period of forty five days before and after the elections. Although, the index over a month before was volatile and after the election has been more bullish. The volatility in the councils and the Assembly of Experts elections is much smaller than the other two elections.