Share Price Movement Analysis

Week 1 – Introduction – Financial Accounting (Review) Week 2 – Financial Markets and Net Present Value Week 3 – Present Value Concepts Week 4 – Bond Valuation and Term Structure Theory Week 5 – Valuation of Stocks Week 6 – Risk and Return – Problem Set #1 Due Week 7* – Midterm (Tuesday*) Week 8 - Portfolio Theory Week 9 – Capital Asset Pricing Model Week 10 – Arbitrage Pricing Theory Week 11 – Operation and Efficiency of Capital Markets Week 12 – Course Review – Problem Set #2 Due

The Dow Jones Industrial Average and NASDAQ are both significant economic indicators. The Dow Jones was created by Charles Dow in 1896. “The Dow” is a price-weighted average of 30 significant stocks, most of which are traded on the New York Stock exchange. The NASDAQ is the National Association of Securities Dealers Automatic Quotation System. It is the first and largest electronic stock exchange in the world, consisting of more than 4000 stocks. Both the Dow Jones Industrial Average and NASDAQ are significant gauges of the current state of the economy. However, the NASDAQ is much larger and includes more than 4000 companies, while the Dow Jones only includes 30 companies. All of the NASDAQ stocks are also traded on the NASDAQ exchange,

Allocating the ownership of economy’s stock capital is the primary role of capital market. In an ideal market the price would provide accurate signals for allocation of resources. Ideal market is one in which firm’s production-investment decisions and investor’s decision regarding securities will depend on the assumption that the security prices fully reflect available information at any point in time. A market in which prices always “fully reflect” available information is called efficient.1

The stock that I bought was Southwest, which has the ticker symbol of LUV. When I bought this this stock each share was $39.47$ I bought a total of 15 shares, Southwest is a passenger airline that operates in 41 U.S states and 9 near-international countries. I chose to do Southwest because it is one of the busiest times of the year when people tend to travel. Also, Southwest is a cheap airline company and people don’t want to spend a lot of money these days.

The efficient market hypothesis (EMH) has been subject to professional and academic debate and analysis for many years, and refers to the theory proposing that stock prices show all information regarding a firm’s value. An efficient market is a market in which investors with the same information and similar investment goals compete actively (Sewell, 2012). Many private investors and investors aiming to make profits are involved with the stock market and often make low risk investments while aiming for high rates of return. However, the efficient market hypothesis states that it is impossible to consistently outperform the stock market as the market is able to quickly adjust to new information. The Efficient Market Hypothesis also addresses

Mostly everyone in today’s world has heard something about stocks. However, not a lot of people know what stocks are exactly, and what it is that they do. Many movies, such as Wolf of Wall Street, and Big Short, have been made to illustrate stock exchange market and give us a better picture on how that crazy lifestyle on Wall Street work. There are still many questions circling around that focus on how stocks are governed, and how they are regulated. To get a full understanding on just how stock exchange works, we will take it back to its origins, and slowly build our way up to getting a true understanding of their function.

In article of 1971, Fama categorised market efficiency into three main forms. Weak form is based on the historical data of the stock prices. The semi-strong form tests how efficiently prices adapt to the publically available information. The third form is concerned whether any given market participants having monopolistic access to the creation of the stock prices.

The FTSE is bantered around a lot within financial circles and seems to be a key element within many news headlines too. While the term FTSE is commonly known, few actually understand the FTSE 250 and what it entails. In order to educate those who are unfamiliar with what it is, the following information should be of great use.

The raw data from the London Stock Exchange was first filtered to only include IPO’s from 2005 onwards, on the main market, listed as “IPO” with “placing” issue type; to get to this original figure of 201 IPOs. These were then filtered further to remain consistent with the previous literature, we remove all foreign listings and those with an initial offering price below £1.

One of the newest stock exchanges is the NASDAQ, which stands for the National Association of Securities Dealers Automated Quotations. It was the world’s first electronic stock when it was founded in 1971. Now it has trading, clearing, exchange technology, listing, information and public company services from six continents. The Nasdaq has over 3,600 listed companies, a value of approximately $9.6 Trillion and more than 10,000 corporate clients. The technology that is behind the NASDAQ is now used in over 50 countries. It is so widespread that one out of every ten transactions happens in NASDAQ’s security transaction program.

Also called the “Big Board”, it is the largest stock exchange in the world in terms of dollar volume and second largest in terms of number of companies listed. The Tokyo stock exchange was established on May 15, 1878 and trading began on June 1, 1878. In 1943, the exchange was combined with ten other stock exchanges in major Japanese cities to form a single Japanese Stock Exchange. It is the second largest stock exchange market in terms of monetary volume and currently has 2302 listed companies. The Hong Kong stock exchange is the 8th largest stock exchange in the world in terms of Market capitalization. The Hang Sang Index (HIS), was started on November 24, 1969. The Russian stock exchange was established in 1995 by consolidating the separate regional stock exchanges into one uniformly regulated trading floor. The Korea stock exchange was created by the integration of the three existing of the Korean Spots and Futures exchanges (Korean stock exchange, Korean futures exchange & KOSDAQ) under the Korea Stock and Futures Exchange Act.3.5. In this paper, the names of the countries and the names of the indices of those countries have been used interchangeably. Thus, the names of the countries represent the indices for the

When I started this project, I had very limited understanding of the foreign exchange market and also had a limited understanding of the economy and currencies. This Project has given me more knowledge than the average forex trader, giving me a huge advantage in the world’s most liquid market. This paper covers what I have created from the knowledge we have learned.

Aberdeen Asset Management plc (for the purpose of this report I will refer to the company as Aberdeen) is an international investment management group that manages assets for third parties; institutions and individuals (p.2, MarketLine Company Profile, 2015). Aberdeen is an extremely large firm and results from the last financial year showed net revenue of £1,117.6m and a pre-tax profit of £324.4m (p.1, Final Results 2014, AAM Plc). The group employs over 2,600 members of staff, in 33 offices across 25 different countries around the world, with its headquarters based in Aberdeen, Scotland (p.4, MarketLine Company Profile, 2015). The company has seen rapid growth since it was founded in 1983 through acquisitions and internal growth. In 1991 it began floating on the London Stock Exchange under the name Aberdeen Trust PLC (p.5, MarketLine Company Profile, 2014). Fig. 2 shows how the success of the company is reflected in its increasing share price since floatation, earning it a place in the coveted FTSE 100 Index in 2012 (Our History, aberdeen_asset.co.uk). The firm is authorised and regulated by the Financial Conduct Authority (FSA) in the United Kingdom jurisdiction. Aberdeen is a public limited company (plc) which means it has limited liability and its shares may be freely sold and traded by the public, Fig 2 shows the fluctuation of the share price in recent years. The current market capitalisation of Aberdeen, which is calculated

Trading in securities is facilitated by information investors obtain about an entity’s performance. An entity that performs well in its operations by earning consistent profit adds value to its

Economic theory proposes that there should be a strong link between economic activity and stock prices, given that its price is the discounted present value of the firm’s payout. If this payout is finally a function of real activity, such a link should exist.