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Dr. Andy Fodor incorporates BP oil spill into his lectures…and his students love it

Tuesday, April 19 2016 12:00am

Current events help keep this professor’s classroom relevant

By Brianna Wilson

In the wake of a catastrophic oil spill, media attention is far from sparse. At least that’s how it was after the BP Deepwater Horizon oil spill in the Gulf of Mexico, circa 2010. Panels discussed environmental repercussions, news channels ran segments on who was to blame, BP focused on how to address its public relations crisis, and citizens wondered why and how this could happen.

Meanwhile, Andy Fodor, chair and associate professor of the finance department at Ohio University’s College of Business, began investigating a lesser public concern: the incident’s financial repercussions.

“The case was so prevalent in the news,” said Fodor. “It was interesting to see how the general public looked at it compared to the investing public.”

Fodor partnered with John Stowe, professor of finance, and ultimately they published a paper about their findings in the Journal of Applied Finance.

Stowe and Fodor found that prices in various security markets moved together closely and efficiently despite highly volatile prices—and that option market participants anticipated the BP dividend cut. Since, they’ve shown that this anticipation was also present during the 2008-2009 financial crisis.  

But Fodor didn’t dismiss the topic after the paper was published. Instead, he brought it to class—and he continues to do so, even a few years later. Through studying the BP case, students review the basics of bonds, equity options and credit default swaps. They also find clear examples of how the various securities and their prices are related.

“The BP paper still gets instant interest from students because it was such a big story and the effects of the event are still being felt. It’s very powerful for them to examine a case they are familiar with that had a clear impact on company value,” said Fodor. “It removes abstraction, reinforces basic principles, and leads to discussion of topics beyond standard course materials.”

“A lot of my lectures are informed by my research, as well as current events,” he said. “I strive to go beyond a textbook approach.”

Fodor also surpasses the textbook by adding an individualized component to his class. “I really enjoy creating relationships with my students, helping them through their academic careers, and even into their professional careers,” he said. “It’s one of my favorite parts of being a professor.”