Role Of The Stock Market On A Financial System Essay

There are millions of ways to make money in the world. Every day millions of people invest their money in the New York Stock Exchange (NYSE). On average, there are five trillion dollars in stocks traded daily (Picardo).This is one of the reasons America has the largest economy in the world. The stock market creates jobs for thousands of people and has done nothing but show a steady increase since the day it opened (Knight). Wall Street symbolizes the way America’s economy is a free market. The stock market affects almost everybody, not only in America but all over the planet.

In the beginning, there was no real stock market. However stock exchanges did take place in smaller groups and corporations. This all took place during the 1700's where stocks were already around for a long time before that but it wasn't really popular in the United States. Stocks originally started as auctions where traders called out names of companies and the shares available. There was a auction that took place and the shares went to the highest bidders.

In order to succeed in any business, it is extremely important to understand the stock market. In this assignment we were asked to follow the stock market continuously for four months and understand the market. The stock market is a global marketplace, where goods and services are traded in the form of equities.

For many people, the star market is a popular method for obtaining money quickly. Despite the risks, many people invest their money in stocks. The stock market allows the public to buy shares of a company, or a stock. These shares come in the form of an official document, and grants you a small fraction of the company you invested in. As companies do well, their stocks are worth more. Stocks can be bought and sold through the help of a stockbroker. The goal is to buy a share of a company, then later sell the share for more money than you bought it for. However, the market is risky; this is proven by multiple crashes in the market, resulting in loss of money.

The whole idea behind the stock market is that money is needed to buy items like machines and

The stock market is a risky business. Investing can make you wealthy beyond your wildest dreams, in which only a few investors have found the formula. Otherwise making the wrong decision

The “Stock Market” is a term that actually describes several markets such as the New York Stock Exchange NASDAQ, where the stocks of companies are traded. Shares in a company are sold and the shareholders then become part owners of the company. Offering shares of stock raises money for continued research and development of company products or services.

For the month of December, I was given an assignment consisting of $100,000 and four stocks to invest in. My four stocks were The Ralph Lauren Corp., Visa Inc., Master card Inc. and The Chevron Corp. As stated I was given a month to record my data and I ended up with a total capital gain of $5,518.36 for the one month period for my investments. I have to thank you Mr. Acker, this project was not difficult, but it did confuse me. Receiving this assignment scared me in a way, because I didn’t know what I was getting into. The finance world is scary and tricky, one minute the market is doing good and other days it would be low. While calculating my capital gains or losses I thought I would lose a larger

During the 19th century, most of the things traded in the Stock Exchange were government bonds. Few corporations were in existence during this time but they were primarily banks that people could buy and sell stocks. Over the centuries more companies joined the exchange with the railroad industry dominating the market through the 20th century. The invention of the telegraph allowed for easier trading and membership expansion. The current membership is limited to 1,300. The organization is a nonprofit organization that minimizes fraudulent offers and providing a safe investing environment. The market works by investors buying and selling shares of a company. The value of the shares depends on the value of the company and its

The Stock Market is a vast and confusing setting. It has influence on many aspects of the economy like pensions, bond markets, and even retirement accounts. However, many aren 't educated about how the Stock market works, how it affects the economy, the difference between stocks versus bond and mutual funds, nor the amount of illegal activities taking part within the stock market.

The Stock Market is an organized market for the trading of stocks and bonds. In Europe a stock exchange is often called a bourse. Stock exchanges exist in all-important financial centers of the world. Members of an exchange buy and sell for themselves or for others, charging commissions. A stock may be traded only if it is listed on an exchange after having met certain requirements. The New York Stock Exchange (founded 1790) is the largest in the U.S., handling more than 70% (in market value) of all transactions. The American Stock Exchange (Amex), also in New York City, and regional exchanges account for the remainder. Unlisted shares, often of smaller companies, are traded in the growing over-the-counter

Over the past semester in Economics I have invested in and monitored the stock market. I learned how investing in certain companies can be risky and proper research about the companies are detrimental before buying stocks. Three stocks that have influenced most of my financial earnings and losses include Twitter, Amazon, and Pepsi.

7. Compare your valuation with Smith Barney’s. What assumptions do you have to make to get the terminal value EBITDA multiples used by Smith Barney. Is there any benefit of their method relative to FCF method?

Gittman (2004, pp. 312) divided stock into two types, such as common stock and preferred stock. He also showed that dividends are the outcome of investment. So, common stocks are an ownership claim against primarily real or productive asset (Higgins, 1995), but he also said that if the company prospers, stockholders are the chief beneficiaries, if it falters, they are the chief losers. Smith (1988) presented that stocks are one of the most popular forms of investment. People buy stocks for various reasons: some are interested in the long-term growth of their investment by buying low priced stock of a new company in the hope of substantially growth of share price over the next few years. Another reason he suggested that in a well established firm stockholders expect the stock growth will be stable over the long run. (Smith,1988).

An initial public offering is the decision by a company to sell its stock to the public for the first time. In some cases, this process is described as a transaction with which an investment banking company generates investment capital though making the company to go public. One of the most critical aspects within an initial public offering is significant public interest because investment bankers generate huge fees depending on the amount of capital raised. Consequently, the interest of investment bankers is usually attracted by large or well-recognized companies. Initial public offerings are sometimes characterized with huge gains on the first day but they tend to flop when the financial market is cold.