LIMITED HOUSEHOLD PARTICIPATION IN THE STOCK MARKET PHENOMENON ANALYSIS
ISM UNIVERSITY OF MANAGEMENT AND ECONOMICS
BUSINESS MANAGEMENT AND ANALITICS
BACHELOR STUDIES
DOVILĖ ,JURGA, ARŪNAS ,MANTAS P
2011 05 08
LIMITED HOUSEHOLD PARTICIPATION IN THE STOCK MARKET PHENOMENON ANALYSIS PERSONAL FINANCE ASSIGNMENT VILNIUS, 2014
CONTENTS
TITLE PAGE…………………………………………………………………………….1
CONTENTS………………………………………………………………………………2
1. INTRODUCTION………………………………………………………………………..3
2. STOCKHOLDING………………………………………………………………………4
3. HOUSEHOLDS’ FINANCIAL MARKETS OVERVIEW………………………………6
4. MARKOWITZ PORTFOLIO THEORY…………………………………………………7
5. FACTORS THAT DETERMINE STOCKHOLDING DECISION OF HOUSEHOLDS .8
5.1 AGE
5.2 FINANCIAL STATUS
5.3 MARITAL STATUS
5.4 EDUCATION
5.5 GENDER
5.6 CULTURAL VALUES
6. REASONS WHY HOUSEHOLDS PARTICIPATE IN STOCKHOLDING……….12
6.1 FINANCIAL LITERACY
6.2 PRESENCE OF BACKROUND RISK
6.3 TRANSACTION COST
6.4 REGULATIONS
7. CONCLUTIONS…………………………………………………………………….15
8. REFERENCES………………………………………………………………………..16 1.Introduction2.StockholdingStockholding is the ownership of the stocks or shares in the company. There are two types of stockholders in the company that are classified according to the type of stock they own. Firstly, there are common stockholders that hold common shares of the company. Common stockholders have a right to ownership of the company. Moreover, they have voting right on corporate issues as well. Lastly, stockholders have a right to declared common dividends. Another type is preferred stockholder. These stakeholders own preferred stocks in the company. The primary right that they have is to receive dividend payments. Moreover, in this case the amount of dividend payment is fixed. However, the payments might be annually or on a lower frequency as well. Preferred stockholders have a higher claim to company’s assets and earnings than common stockholders. However, the later have a voting right. In the event of liquidation, preferred stockholders would always have a priority over common
BUSINESS MANAGEMENT AND ANALITICS
BACHELOR STUDIES
DOVILĖ ,JURGA, ARŪNAS ,MANTAS P
2011 05 08
LIMITED HOUSEHOLD PARTICIPATION IN THE STOCK MARKET PHENOMENON ANALYSIS PERSONAL FINANCE ASSIGNMENT VILNIUS, 2014
CONTENTS
TITLE PAGE…………………………………………………………………………….1
CONTENTS………………………………………………………………………………2
1. INTRODUCTION………………………………………………………………………..3
2. STOCKHOLDING………………………………………………………………………4
3. HOUSEHOLDS’ FINANCIAL MARKETS OVERVIEW………………………………6
4. MARKOWITZ PORTFOLIO THEORY…………………………………………………7
5. FACTORS THAT DETERMINE STOCKHOLDING DECISION OF HOUSEHOLDS .8
5.1 AGE
5.2 FINANCIAL STATUS
5.3 MARITAL STATUS
5.4 EDUCATION
5.5 GENDER
5.6 CULTURAL VALUES
6. REASONS WHY HOUSEHOLDS PARTICIPATE IN STOCKHOLDING……….12
6.1 FINANCIAL LITERACY
6.2 PRESENCE OF BACKROUND RISK
6.3 TRANSACTION COST
6.4 REGULATIONS
7. CONCLUTIONS…………………………………………………………………….15
8. REFERENCES………………………………………………………………………..16 1.Introduction2.StockholdingStockholding is the ownership of the stocks or shares in the company. There are two types of stockholders in the company that are classified according to the type of stock they own. Firstly, there are common stockholders that hold common shares of the company. Common stockholders have a right to ownership of the company. Moreover, they have voting right on corporate issues as well. Lastly, stockholders have a right to declared common dividends. Another type is preferred stockholder. These stakeholders own preferred stocks in the company. The primary right that they have is to receive dividend payments. Moreover, in this case the amount of dividend payment is fixed. However, the payments might be annually or on a lower frequency as well. Preferred stockholders have a higher claim to company’s assets and earnings than common stockholders. However, the later have a voting right. In the event of liquidation, preferred stockholders would always have a priority over common
References: Fig. 2. Optimal portfolio selection (Tvaronavičienė, Michailova2004)2 5