Questions tagged [stock-market]
Markets in which ownership stakes of firms (e.g. stocks/shares) can be traded.
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What happens to interest rates when they are already at (near) zero and the stock market crashes?
Let's say the global stock market crashes in the coming months (it's currently at an all time high in the western world). What happens to interest rates?
"Usually", as I understand from my absolute ...
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20 views
How does denominator effect works?
People say that when overall market falls,
Prices of real estate rise because of denominator effect.
But what is the logic behind it ?
My understanding of denominator effect is ---denominator is ...
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17 views
Did Johnson and Johnson really pay a 25% quarterly dividend in 1978?
I looked through some of the old Dow Jones stocks for a project I'm working on and found some inconsistency with JNJ stocks.
Basicly for a share price of $1.66 they appeared to pay \$0.42 in quartely ...
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13 views
How to quantify tax liability of unrealized cap gains in mutual fund
Consider an S&P 500 mutual fund. At any moment the holdings of the fund include unrealized cap gains that should eventually generate tax liability. Thus, for a potential investor, the fair value ...
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14 views
At what rate can a multi-billionaire liquidate his assets without significantly affecting the stock price?
Let's consider three different billionaires: Jeff Bezos, Bill Gates and Warren Buffett. Now let's say the three of them (at different times) decided that they want to liquidate all their assets and ...
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26 views
Stock price and exchange rate is correlation, but VAR model order is zero
It is well known that Japanese stock price and exchange rate(USD/JPY) is correlation, So I built a VAR model in python about stock data(Tokyo stock price index) and exchange rate(USD/JPY) and I fitted ...
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2answers
57 views
EMH: Difference between market price and fundamental value?
I am confused by the relation between stocks market prices and fundamental (or intrinsic) values stated by Efficient Market Hypothesis. How these deviates regarding to efficient market theory or are ...
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2answers
34 views
ROI and stock rates
I'm an engineer with minimal to zero knowledge about economical topics, please be patient with me if the following question makes no sense or is too basic ...
Currently I'm working through the "...
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1answer
30 views
Banks and Stock Market in Germany
My question is:
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Why does Germany have such a small stock market, but very large
powerful banks?
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8 views
Effects of Passive/Active market allocations on liquidity and Bid/Ask spread
In The Paradox of Active Management, the author argues that in the event of a shift from Active to Passive management, Bid/Ask spreads and market liquidity will be affected,
In our scenario, the ...
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25 views
Get Annualized return from a time series of daily returns
I have a time series of data which has daily returns over 15-year time period.
I understand that you get multi-period simple return using the following formula.
$$1 + R_{t}(k) = \prod_{j=0}^{k-1}(1 +...
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12 views
Volatility measure in Diebold-Yilmaz connectedness approach
I am trying to create Diebold-Yilmaz connectedness table for returns and volatilities. When I do it for returns everything works properly (I can reproduce their work actually) but for volatilities I ...
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15 views
List of important business and economic news events between 1850 and 1930?
I'm collecting data on important business and economic news dates in the late 19th to early 20th century. The only list I found is this: https://www.encyclopedia.com/history/news-wires-white-papers-...
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1answer
40 views
Fall in share due to litigation
Recently, I read a news article stating
Indiabulls Housing Finance shares plunges on reports of litigation against company
Why do shares plunge when company finds itself in a litigation process? ...
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0answers
26 views
Which assets beat the injection of money and why?
Suppose a world in which every year $1.03 ^ Y$ liquidity is injected.
Which assets could perform better than 3% per year?
Growth forecasts for these?
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1answer
29 views
Why does equity have historically poor performance after rate cuts?
I am struggling to understand why equity markets seem to suffer shortly after fed rate cuts. Here is a rather telling chart:
Question
Assuming not some kind of spurious relationship, what's the ...
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3answers
134 views
Does stock picking work?
Does stock picking work? Why/why not? What does the research say about it?
(I was expecting that this should already have been asked and looked quite extensively for such a question but couldn't find ...
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1answer
33 views
How to calculate cost of equity?
So i have this question on leverage and cost of capital:
Leverage and the cost of capital Gamma Airlines has an asset beta of 1.5. The risk-free interest rate is 6%, and the market risk premium is 8%....
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1answer
71 views
How to calculate standard deviation of a portfolio?
So i have this information:
Suppose that 60% of your portfolio is invested in Johnson & Johnson (JNJ) and the remainder is invested in Ford. You expect that over the coming year JNJ will give a ...
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0answers
22 views
Was magnitude of concerns about market correction/crashes prior to previous crashes similar in magnitude to today's concerns?
I am still new to learning about stock markets, and I have more of a history question. Right now, I hear a lot of people express their concerns of a market slow down within the next 1-3 years, or ...
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17 views
Stock market's obsession with growth of all companies?
I understand the stock market is a useful place to gain capital which allows further growth of a company. But it seems to me that even companies that have been on the stock market a while, appear to ...
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0answers
13 views
Stock Price vs Stock Return Autocorrelation
There are a lot of paper that claim stocks follow a random walk and therefore not predictable. A basis for this statements often times a autocorrelation test of the returns. However, what if there is ...
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0answers
18 views
Decomposition of stock index movements
I want to decompose stock index movements. I know the estimated 12 months earnings growth rate ($g_1$), estimated long run earnings growth rate ($g_2$) and the index value.
I am about to use two-...
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1answer
24 views
Open offer made by companies to take over [closed]
What is open offer in simple terms? What is its meaning in cases of taking over the major stakes in other company?
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0answers
10 views
Commonly used indicators for currency pair strength?
I am attempting to write a program in Python that monitors a single currency pair, GPB/NZD to be specific. My main focus will be to run constant calculations every 2 to 3 minutes in order to give ...
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3answers
81 views
Why does a company want the value of its stocks to be as high as possible?
My professor claims that a company want the value of its stocks will be as high as possible. Why should the company care? The company "minds its own business" and make its money. Why should it cares ...
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1answer
46 views
Is this lottery like stock market? [closed]
Consider the following imaginary lottery (motivated by
Massachusetts' Cash WinFall):
Ticket money obtained in the previous draw are given to the participants of the next draw proportionally to the ...
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0answers
17 views
Where to find a list of marketplaces (NYSE,LSE) and the financial products they offer?
I'm looking for a list (csv/json/api...) of all marketplaces (New York Stock Exchange...) and the financial products that are offered on those market places.
Preferrably worlwide but US and EU will ...
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0answers
20 views
Average Return for Commodity
Suppose I have a function of a varying values represented by randomness. A stock or price of a commodity would be a good example.
What is the average return for that stock on any given interval of ...
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0answers
37 views
Can a government invest in public companies so their dividends can finance the government
Is it possible that a country could use the money in its sovereign wealth fund to invest in different country's Stock Market and use the dividends to finance its government thus increasing spending ...
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1answer
32 views
How to find data about earning per share of S&P 500
I am working on a small project regarding PE ratio of SP500,for which I need historic earning per share data of SP500. I searched finance yahoo, but it has only prices data. Could anyone tell me the ...
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1answer
64 views
How time zones affects causality?
Considering that markets open in different time zones, in general the opening and closing times are different.
I suppose that a stock market opening later (in the same day) receive information on the ...
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1answer
58 views
Is this market monopoly or duopoly?
Could you help me to identify monopoly, because I got confused. There is a company with market share of 54 %. The second one has market share of 21 %.
Can this market be characterized as monopoly or ...
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1answer
24 views
Is it possible for shareholders to get a companies assets in place of currency?
To my knowledge being a shareholder is owning a portion of a company. Then by that logic shouldn't a shareholder be able to request a companies assets instead of money? As an example, if I own 100 ...
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1answer
41 views
log returns in finance
Why are log returns used in finance? For example to calculate a stocks performance. There are a lot of articles on that topic yet I don't find them very helpful. Could somebody please explain step by ...
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2answers
103 views
Why does firing employees appear to increase the share price of a company?
The last case is GM in the USA. I fail to understand why does this happen. I understand that laying off jobs means higher dividend for the share holder and thus higher stock prices but in the long run ...
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3answers
125 views
Bank Runs During the 1930s
Why were there numerous banks run right after the stock market crash of 1929? Why would a bank fail because the stock market crashes?
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1answer
31 views
Is it possible to commodify the State?
Karl Marx said that capitalism commodifies everything. So I'm wondering if that rule applies to the very State itself.
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2answers
72 views
How are the price signals of stocks in the stock market centralized?
We can look up the price of a stock, like that of Google, and it gives a particular figure. I would like to know how the price signal is "centralized". What I mean is: if the trades happen between ...
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2answers
114 views
How is the GDP growing when nothing else seems to be?
We've had strong GDP growth all three quarters this year. To me, that would indicate that, in at least some areas, we should be seeing growth. However, from my extremely ignorant armchair, it doesn't ...
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2answers
579 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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1answer
22 views
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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1answer
44 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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1answer
25 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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0answers
62 views
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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2answers
78 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 ...
2
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1answer
49 views
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....
5
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1answer
50 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?
2
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1answer
36 views
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
39 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 ...
