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Questions tagged [stock-market]

Markets in which ownership stakes of firms (e.g. stocks/shares) can be traded.

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Open-source app to aggregate financial data and plot them?

I didn't find a policy for this site, so I hope this is not off topic. However it fits here more than a programming site. I started coding an open source app that will aim to Gather financial and ...
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407 views

What does a stock market index stand for?

I know that a stock market index (like S&P, NIKKEI, etc.) is computed from the prices of selected stocks, but I was wondering why the name of the currency is almost never expressed. For example, ...
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How are final stock prices arrived at?

'Everybody' knows that prices are generally governed by offer & demand, but I am wondering on the details of the stock exchange here. How are stock prices (the ones which are nicely listed every ...
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29 views

Why will the holder of a broad-based index fund, by definition, achieve the average return for the market?

A Random Walk Down Wall Street (2015 11 ed, but an 2019 ed. is upcoming). pp. 271 Bottom – 272 Top.   All “smart beta” strategies represent active management rather than indexing. Capitalization-...
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Who pays wash traders' transaction costs?

A Random Walk Down Wall Street (2015 11 ed). p. 49 Bottom - 50 Top.   Pool members were in the swim with the specialist on their side. A stock-exchange specialist functions as a broker’s broker. If ...
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8 views

Why do wash traders need 'a broker's broker'?

A Random Walk Down Wall Street (2015 11 ed). p. 49 Bottom - 50 Top.   Pool members were in the swim with the specialist on their side. A stock-exchange specialist functions $\color{red}{\text{as a ...
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7 views

What is the lifecycle of mutual funds and or exchange funds? [closed]

Looking at it form a Financial Broker dealers perspective how does he make when creating several mutual funds? From what I understand launching new mutual funds is in their interests but why and how ...
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1answer
23 views

What would an investment bank have to gain by warning of an impending financial crisis?

After reading a recent article and a discussion with a friend, I was left wondering what an investment bank would have to gain by claiming that a financial crisis is coming. I can see an obvious ...
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Why did many tech companies' stocks drop during March through April 2018?

I noticed Alphabet, Microsoft, Apple, Samsung, Sony, Amazon, Texas Instruments, and others had significant drops during the 12-19th of March specifically. Though, many non-tech companies such as ...
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Value of companies with circular ownership [duplicate]

Given two companies, total assets of $100 million each. Company 'A' owns \$50M of company 'B'. Company 'B' owns \$50M of company 'A'. If you look at the value of both companies do you ...
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20 views

Has the stock market DJIA stalled out?

In the midst of the all the rhetoric about a "booming economy", has the DJIA stalled over the past six months? I looked back over the past 18 months, calculated the daily DJIA on a 30 day (looking ...
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Relation between assets, liabilities on one hand and equity on the other

Hello I am reading Security Analysis and I do not understand when calculating the par value of a stock the relation between ["common stock", "preferred", "bond"] on one hand and "[Assets, Liabilities]"...
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Facebook shares moving from NASDAQ Stock exchange to the Canadian stock exchange?

Is it possible for a publicly traded company to move the sale of its shares from one country to another? e.g. Facebook shares moving from NASDAQ Stock exchange to the Canadian stock exchange. If so, ...
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2answers
61 views

Why is the stock market always rising?

I asked myself: How is it that the stocks are always rising? How is money generated every year so that the value of a company rises? I mean, at some point there is a finite amount of money in the ...
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Macroeconomic control variable in GARCH

I would like to model the effects of news coverage on stock returns using a GARCH model. News is given a sentiment score, which is included in the regression as a (daily) variable. However, I would ...
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16 views

Netflix Stock 7-for-1 stock split in 2015: why is this not reflected in the stock price chart?

In 2015 Netflix (NASDAQ:NFLX) had a 7-for-1 stock split. Now looking back in the stock price charts of Netflix, I would expect to see the price being only 1/7 of the price before the split. However, ...
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1answer
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what does historical volatility explain?

Let's assume we have close prices of one stock of period one year. As far as I understand historical volatility is standard deviation of log return, however I do not understand what this actually mean....
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Different values of market capitalization from different sources

From World Bank, I have smaller values of market capitalization than the values from Econstats. The only difference I found is that in the first data source, the name is "Market Capitalization (...
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1answer
42 views

Are stock exchanges market makers?

Are stock exchanges like NASDAQ and NYSE market makers? In other words, are they providing liquidity by pairing individual buyers and sellers with each other in real-time? Or does it work differently?
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1answer
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Where can I find data on market capitalization?

I am working on Home Equity/Bond Bias and need data to calculate the indicators of Home Equity Bias. So where can I find data on market capitalization (stocks and bonds) by year for each country? ...
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1answer
27 views

Market Value Changing in Response to News

On May 24th the DJIA dropped and the news has been attributing it to Donald Trump's cancelation of a talk with North Korea (see image below). My understanding is that the companies making up the DJIA ...
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1answer
20 views

Growth in dividends will equal growth of earnings

Let $Div_t$ be the dividend per share at date $t$. $\displaystyle Div_t=\frac{\text{Earnings}_t}{\text{Shares Outstanding}_t}\times\text{Dividend Payout Rate}_t$ ------------------- (1) My textbook ...
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How does a stock market work under a command economy

If a central government owns the means of production and controls business, what ramifications does that have on a stock market? Under such an economy are shares still traded as they are in a mixed/...
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Is there any stock issued in foreign currencies?

We have international bond issued in different currencies (domestic and foreign). Do we have the same fact for stocks? for example, my company in Switzerland may issue some stocks in CHF, can I issue ...
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4answers
432 views

Can the stock market grow faster than GDP indefinitely?

My understanding of conventional wisdom is that average long-term growth of advanced economies is expected to be significantly lower than the average long-term growth of the value of the largest firms ...
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Why does US jobs and inflation have an affect on European equities?

There are articles such as 'European shares crawl higher as investors eye US inflation data'. Is this just put down to Americans may have more money to spend overseas so investors speculate higher ...
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3answers
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What is the exact relationship between the efficient-market and random-walk hypotheses?

The efficient-market and random-walk hypotheses are often discussed together as formalizations of the idea that "you can't consistently beat the stock market". But in my experience, they're often used ...
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2answers
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What does a “sell-off” mean if every stock transaction is balanced?

If every stock transaction is "balanced" (1 sell = 1 buy), then what does a "sell-off" actually mean and how does it move the price of a stock? Ex. If millions of people sell a stock, there's ...
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1answer
17 views

Alternative measure for market capitalization, company “value”

I wonder what the term "value" of a company, currency, etc could mean. The most obvious, to me, is market capitalization (related: Clarifying the meaning of market capitalization) Is there also ...
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1answer
488 views

How to calculate average buy price when you buy, sell and rebuy

I wanted to get my avaerage buy price for some stocks I bought and see if I made money. So far for just buying and then later selling I have been calculating the avaege buy price using this formula <...
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47 views

What caused the increased market trading since late 2016?

I was looking at the market (DOW) performance today and noticed an oddity: Beginning late in 2016 trading activity roughly tripled. The change was sudden and remarkably consistent. What would cause ...
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26 views

U.S. stock market 2/5/18

Why did American share prices fall sharply on February 5, 2018? What are the major contributing factors to this?
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12 views

Trading - pending bids/offers

For a while I have been doing some personal research into technical trading. I have seen assorted documents and videos where people discuss charts showing the price moving up and down. No doubt there ...
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1answer
63 views

World Stock Markets that went up in 2008

We all know that the US stock market(s) collapsed in price in 2008, see https://en.wikipedia.org/wiki/United_States_bear_market_of_2007%E2%80%9309. I was wondering what countries' stock markets went ...
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2answers
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Pro and cons to finding coal

I found some Anthracite coal. I know a coal bed of this quality is worth money? I also know that there is a "no pun intended" carbon foot print if I decide to share my findings to others. Economics ...
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1answer
36 views

How Mark Zuckerburg (or any other company founder) got valued at billions?

I read that Facebook got worth at billions after IPO, but how did this brought money to Mark himself. And did Facebook earned before IPO, or after IPO. I think that after facebook earns from revenue ...
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30 views

Adjust Stock Index for Inflation

If I were to adjust stock index for inflation, is that i could do so by dividing the stock index by the CPI (Based on a particular year) of the particular year and then multiply it by 100? But is it ...
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1answer
61 views

testing the relationship between stock price and macroeconomic variables

I'm in the midst of preparing data to test the relationship between stock index and macroeconomic variables. The variables include m1, cpi, ipi, interest rate, exchange rate. I have some question ...
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2answers
36 views

Economic Data - Frequency

I obtained the historical CPI data available in monthly and quarterly format from a data repository. It seems that the Q1, Q2, etc. data are the average of the monthly data. I thought that if I were ...
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2answers
155 views

Fisher Effect - inflation and stock return

This is my understanding: Fisher effect posits that expected nominal returns on any asset would move one-for-one with expected inflation. That is, when expected inflation increase, the nominal return ...
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1answer
73 views

Inflation and stock price

I have indicated my understanding and problem on the attached image below. I'm a bit confused on the impact of inflation on stock price. As increase in inflation would cause nominal interest rate to ...
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1answer
73 views

What lies behind supply and demand model?

This is a very basic question. I can understand that price of goods and stocks change follows the supply and demand law. On the other hand, I find it difficult to understand what happens in the real ...
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0answers
23 views

Best texts on cash usage and share buybacks in companies

What would be a good reference for how companies utilise their cash to conduct share buybacks. I am trying to understand how share buybacks affect the valuation of a company.
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Why are share repurchases particularly accretive?

From the "Manual of Ideas"... VALUE CREATION VIA BUYBACKS Share repurchases tend to be particularly accretive in the case of companies generating cash from operations while trading below tangible ...
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18 views

In a closed system, what is the relationship, if any, between currency supply and market capitalization?

Assuming: A world in which the market value of publicly traded companies is known Any transaction to buy or sell stock of said companies can only be consummated with a new currency X, which is freely ...
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1answer
1k views

How to convert daily returns to annual returns?

I have a task: to download daily stock quotations, create a portfolio and draw a CML-line. Risk-free rate was given: 6.5% of annual. I decided to convert daily returns to annual returns, using formula ...
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1answer
40 views

How do companies with shareholders close up shop?

How can a company with shareholders stop operations without being acquired or going bankrupt? How is a company with shareholders that is closing up shop able to give shareholders money back for ...
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1answer
63 views

How do Sharks make money on Shark Tank through equity alone?

When the Sharks on Shark Tank buy equity in private companies, how do they eventually make money by purchasing only equity? For example, if the company makes a lot of money for a few years but then ...
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1answer
52 views

How can CVS which has about 3 billion in cash on hand buy Aetna for 69 billion?

How will CVS be able to buy Aetna for 69 billion if CVS only has 3 billion in cash without borrowing a large amount of money? I understand that a company can trade for a multiple larger than 1 of ...
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3answers
187 views

Aside from buying IPOs, what exactly is the point of shareholders?

The more I look at the shareholder system in modern capitalism, the more it starts to appear as nothing more then an otherwise meaningless system that allows rich people to profit off others work ...