Questions tagged [stock-market]

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

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1answer
35 views

Why is it relevant for a company to use dividends to incentivize shareholders to maintain ownership of the company's stocks?

I was reading the definition of "Bottom Line" on Investopedia and one of the reasons companies increase their bottom-line is to issue payments (dividends) to stockholders as an incentive to ...
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19 views

Why does Canada allow merely 9% spread between the trailing stop price and its limit offset?

I'm assuming that "limit offset" just means "limit price". Help & How-to | Questrade There is no maximum allowable spread between the limit offset and the trailing stop price ...
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30 views

2 Questions on this Article-Interview by Vanity Fair with the film-maker of the 'China Hustle' documentary

I recently watched the 'China Hustle' Documentary (you can get a quick synopsis look on the Wikipedia article if you're not acquainted with the documentary, but it may not be necessary to answer my ...
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27 views

How does the stock market's allocating resources differ from price signalling? [closed]

What does Erian mean that "You allocate uses of funds with sources of funds. And if you price that well, you get an efficient outcome."? Outcome to what? What does he mean the stock markets ...
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2answers
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Macroeconomics differences of 2008 financial crisis and 2020 economic crisis

How is 2020 financial crisis different from 2008 financial crisis? For example, why have stock market indices (e.g. S&P500, NASDAQ-100) recovered so quickly (about 3 months instead of longer than ...
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1answer
49 views

What's the next largest company after Facebook of which the majority of the votes is controlled by a single person? [closed]

Mark Zuckerberg controls 57.9% of all votes among Facebook shareholders [1]. Currently, Facebook's market capitalization is more than $650B. It has been among the global top 10 public corporations by ...
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What exactly do Stop Orders “stop”?

I understand the meaning of a "stop order" after reading https://money.stackexchange.com/q/96056, https://money.stackexchange.com/q/89018, https://money.stackexchange.com/q/7295. But I don't ...
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1answer
61 views

In Trailing Stop-Limit Orders, what does the Limit Offset mean?

I don't understand the "limit offsets" below that I colored red. Why do you need them? In Questrade's example, if the stock rises to your stop price of \$21, then you will be buying at \$21. So why ...
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1answer
51 views

In 2020 depression and pandemic, how do retail traders still have money to rally up US stock market? [closed]

Starting from June 3 2020, US stock market has soared back to its 2020 high. Many stocks sky-rocketed even though their fundamentals didn't improve like airline, cruise ship, oil stocks. "Car renter ...
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1answer
58 views

Can stock exchange workers go on strike?

Today, trade in the stock exchange of my country Israel (TASE) was cancelled due to a union dispute. So clearly, in Israel the answer to the question in the title is "yes". I can't say this comes as a ...
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How can I tell who are major investors in an asset management group and their associated funds?

I am trying to determine which individuals/organizations are the largest investors in Netflix, but when I look at the list of top shareholders, they are all investment management groups. Investment ...
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Why can per share earnings growth only keep up with GDP growth, if no new shares are issued?

I transcribe Ben Felix's speech (BSc Mechanical Engineering (Northeastern University), MBA Finance (Carleton University), CFA, CFP, CIM) starting from 8:33. I just screen shot his animation, rather ...
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How does the stock market correlate with the economy?

What's the Correlation Coefficient between the Canadian and US stock and economy? Don't hesitate to discuss other stock exchanges. On Apr 30 2020, Paul Krugman wrote Opinion | Crashing Economy, ...
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Calculation of theoretical futures value

we form a stock index by using only two stocks in the index. One of the stocks is the Stock-A. The current selling price of the stock-A is 103 dollars and the second stock is the stock-B. The current ...
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Free Cash Flow and stock prices

There is this concept of free cash flow. Now, I have heard is the amount of money left after you reduce from the net income all other expenses that relate to labor and investment and so on. That is ...
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Is there a difference between settlement price vs market delivery price or are they the same thing?

I've been learning about Futures Contracts on Khan Academy (The finance related forum on there is quite old and no one has replied to my questions in the past) and the instructor has used the term "...
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28 views

Macroeconomics: Arbitrage equation and the price of stock

If the bank real interest rate is 2 percent, the percent gain in physical capital gain is 2 percent, the marginal product of capital is 3 percent, and the percent dividend return is 5 percent, what is ...
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1answer
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By buying stocks, am I as an individual measurably affecting the economy?

I know that participating in an IPO is directly helping the company, because my money is going straight into their bank account. I know that the stock market as a whole has an effect on the economy. ...
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23 views

Why is there a demand for stocks? [duplicate]

The obvious answer is of course that people want to make a profit via either capital gains or dividends. Dividend stocks are easy to wrap my head around. As part owner of a company, an investor would ...
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1answer
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CDO and Nonpositive Equity Questions

I have two questions about statements made in this video: https://www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/bank-bailout/v/bailout-2-book-value At 6:25, the video ...
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Why do people care about voting control in companies?

I read a lot of companies who care about who gets voting control over the company. I don't see how this matters. Equity seems like the only thing that you should care about. You can give the voting ...
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Do (any) governments or central banks have an explicit or econometrically probable policy to “prop up” stock market prices?

This assumption (that governments [in the a broad sense of the term] prop up stock prices deliberately) has been taken as a given/assumption in another question here. Is there evidence that they ...
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1answer
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Why doesn't the Federal government just let the stock market crash?

In a normal financial crisis the government tries to maintain the stock market prices to prevent a spike in unemployment as companies collapse and run layoffs. But given that we're in the midst on a ...
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What was the reason for a boom on Wallstreet in 1938?

What was the reason for a boom on Wallstreet in 1938? Our reporter in N.Y. said today that this 1. week of April 2020 was the best since 1938. What was the reason for this rebound in 1938?
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What is the economic sense in multiplying standard deviation by the root of the sample size?

I found an example when a so-called volatility index is calculated by multiplication of a sample standard deviation by the ...
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35 views

How does stock market drop affect the economy if it doesn't affect the corporations?

Sorry if it's a basic question. Suppose corporation ABC went through public offering many years ago. ABC retained 30% of the shares, and 70% are being traded. The very initial offering, ABC made ...
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what would be an efficient investment when central banks have massive qe?

Recently the central bank said in a statement on its website. “Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift ...
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1answer
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Do large- and mid-caps try to shun low share prices?

As NASDAQ and NYSE stocks must be priced at least $1 per share, it feels intuitive and doubtless that large- and mid-caps fancy their share prices to outstrip and remain well over \$1. But what ...
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110 views

What mechanisms are at work when the market falls dramatically one day and then rises just as dramatically the next?

We've seen this scenario several times over the past few weeks: The major stock market indexes will plummet one day and then rise dramatically (though perhaps not to the previous days starting price) ...
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1answer
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Why does the stock market tend to grow over time

At its most basic, the value of a stock depends on how much people are willing to pay an entity that already owns the stock to transfer ownership. The question is, why does the amount people are ...
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59 views

How can I estimate the disconnect between book value and market capitalisation?

There are several questions on Stack Exchange as to what difference the stock price makes to a company after its IPO. Surely, management cares, it is important to be credible to trading partners, etc. ...
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1answer
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Why does Samuelson say common stocks are better than bonds and preferred stocks during inflation?

I’m reading the first edition of Paul Samuelson’s Economics (1948). In Chapter 6, “Business Organization and Income,” after describing bonds, preferred stocks, and common stocks, he writes: To test ...
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20 views

Shouldn't national Stock Indices proportional to GDP of the country?

I was looking at Japan: Japan's GDP trajectory and Nikkei 225. It seems from 2011 - 2015 the GDP contracted but the Nikkei has gone up. Would there be a good explanation for this ?
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What does it mean for a firm to have a 0.95% dividend?

Here's an Apple's dividend: What does this 0.95% mean? Is it 0.95% of share capital? If not, what does it mean?
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List of stock and bond indexes for countries

I am doing some master`s degree research and looking for the list of stock/bond indexes for developed and developing countries. So the excel-file I should gather in the end will look like this: ...
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1answer
36 views

What's the special notation?

I'm studying "ALGORITHMIC AND HIGH-FREQUENCY TRADING". Page 249 of it tries to find a formula for $h(t,q)$. First, it supposes $h(t,q) = \bar\kappa log \space\omega(q,t)$ then let $\omega(t)=[\omega(...
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Can “invisible” investing by the Chinese govt. create bubbles in the stock market?

In this link, they claim that the Chinese govt. secretly pumps money into the market as soon the market crashed due to Corona Virus. How is this different, in terms of long-term impact, from ...
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1answer
85 views

Why does the US government not invest in the stock market?

We often talk about the huge public debt of the US government. Why does it not invest in the stock market (at least in index funds) instead of issuing debt? Can they not reduce the debt that way?
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1answer
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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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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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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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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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1answer
47 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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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
147 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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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
40 views

Banks and Stock Market in Germany

Why does Germany have such a small stock market, but very large powerful banks?
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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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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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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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