Preview

The Ups and Downs of the Nyse

Powerful Essays
Open Document
Open Document
1046 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
The Ups and Downs of the Nyse
The Ups and Downs of the NYSE

Abstract
This paper uses an online dataset provided by our Econometrics class that shows the fluctuation in price as well as the return on investments found in the New York Stock Exchange over a certain period of time. In this paper I will demonstrate through the use of Gretl how the return on investment affects the future price of the investment. As well as why fluctuations in price are directly affected by the returns of the investment.
Keywords: Price, Returns, Investments, NYSE, Price Fluctuations 1. Introduction This paper uses an original dataset provided by our wonderful professor about fluctuations in price of the New York Stock Exchange. Of course we all know what the New York Stock Exchange is, and if you don’t you should. Let me provide a brief explanation of what the NYST is. The NYSE is obviously a stock exchange, the largest in the world actually by market capitalization. It’s located in New York City on Wall Street as you all might have guessed. Its average daily trading value was approximately US$153 billion in 2008. There is no doubt that the NYSE is a powerful force in determining how our economy flows. Now this dataset shows fluctuations in price and what this dataset proves his how the constant change in returns directly affects the price of the NYSE index in the following time period. The term return on investment refers to the percentage of profit made by a single asset in a given amount of time. The way to calculate this percentage is fairly easy, you must find the difference between the old price and the new price, and then divide that number by the old price. This will give you a small number, sometimes negative, that represents the percentage of profit, or the “return”. The reason this number sometimes ends up being a negative percentage is because the return on the asset may be at a loss once in a while. Not all investments are sure to bring back a profit, which is why there is a large amount

You May Also Find These Documents Helpful

  • Good Essays

    Stock Market Dbq

    • 304 Words
    • 2 Pages

    After World War I, the United States attempted to rebuild itself both politically and economically. Unfortunately, the United States economy was very unstable; therefore, the stock market crashed in October of 1929. Many people were investing their income and savings into speculative ventures and even borrowing money from brokers and banks in order to pay for the stock in cash. The stock market crash caused financial turmoil which resulted in many businesses closing and countless layoffs. With so many people unemployed or underemployed, businesses continued to fail and unemployment was at an all-time high. Also, the dust bowl was going on at about the same time, therefore farmers were hurting as well and crops were not flourishing. By 1932,…

    • 304 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    econ 4140

    • 555 Words
    • 3 Pages

    This course is an introduction to financial econometrics. Background knowledge of finance is not required. The objective of the course is to explain, in simple terms, the use of selected statistical methods and econometric models in finance. The content of the course includes simple static and dynamic models of financial returns, elements of portfolio theory, the CAPM regression model, elements of option pricing, the Value-at-Risk (VaR), and the ARCH model.…

    • 555 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    (EMH) refers to share price movement with respect to available information and thus no trader will be presented with an opportunity of making supernormal profits (except by chance), therefore their profits on a share will reflect the riskiness associated with that shares (Pike and Neal 2009). However, “detailed investigations using advanced econometric techniques, larger data sets, increasingly powerful computing ability, and alternative theoretical models have in the last few years revealed a range of anomalies when the unpredictability-of returns hypothesis is tested. Financial markets are often predictable to some extent, but the crucial question is whether this predictability can be exploited to make excess profits from trading in the markets‖ (Mills 1992, as cited by Coutts, 2000, p.579).…

    • 3467 Words
    • 14 Pages
    Powerful Essays
  • Good Essays

    Hrm/531 Week 3 Quiz

    • 1150 Words
    • 5 Pages

    When stock returns do not move perfectly with each other, the variations in the returns on one stock may be countered by variations in other stocks’ returns.…

    • 1150 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    In contemporary society there are many systems of oppression. Racism, sexism and mass incarceration are examples of these systems. The oppression of others has always been around. We see this in society and we learn it from society. My goal in this paper is to show how society perceives systems of oppression as normal. Systems of oppression are seen as normal and natural because it makes a group or race superior. When someone is being oppressed they are seen as inferior because they are being targeted. To support my point I will be connecting Are Prisons Obsolete? And excerpts from “The Egg and the Sperm: How Science Has Constructed a Romance Based on Stereotypical Male-Female…

    • 116 Words
    • 1 Page
    Satisfactory Essays
  • Powerful Essays

    This document is authorized for use only by Yen Ting Chen in FInancial Markets and Institutions taught by Nawal Ahmed Boston University from September 2014 to December 2014.…

    • 6437 Words
    • 23 Pages
    Powerful Essays
  • Satisfactory Essays

    Today you're going to imagine that you invested $1,000 in a company one year ago and see how well your invest would be doing today.…

    • 297 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Dow Jones & Company (as it was called in the beginning) was founded in 1882 by…

    • 376 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    US STOCK MARKET REVIEW

    • 466 Words
    • 2 Pages

    The week of Friday January 24th 2014 was a bad week for the US stock market. As market close Friday January 24th 2014, the Dow Jones industrial average was at its lowest falling by 1.96% making it the worst week since November 2011 moreover the S&P 500 and NASDAQ also fell by about 2%1 Hibah Yousuf, CNNMoney. The drop in stock prices was a result of slow economic recovery in the United States, EU region, and slowdown in China as well as emerging world economies like Argentina and Turkey. Although the economy forecasts for developed nations look promising, actual economic growth have been daunting since the 2007-08 financial crisis creating lower investor confidence. Low investors’ confidence as a result of slow growth in the US economy is bad for the stock market as investors opt for safer ways to keep their money. Therefore, this could lead to low companies performance/production, low consumer spending that ultimately put negative pressure on stock markets.…

    • 466 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Time Series Analysis

    • 1874 Words
    • 8 Pages

    Figure 1 shows a time series plot of the raw Ford stock prices against time. From this plot, a gradual but continuous upward trend can be observed. This trend was disrupted in 2005 when the stock prices experienced a huge rise moving from below 5 to above 25. This rise in stock price by Ford was not sustained as can be seen from the plot; the prices which reached a peak of above 25 fell to a about 10 by the end of 2005 and fell further in 2006 to a level below 5 fluctuations in the stock price existed and in 2007 the prices began to level out.…

    • 1874 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    Interesting thoughts have been released on how investors should trade with stock movements. The dynamics of modern trading strategies are primarily based on one of the most important studies ever written in financial management: Technical analysis on stock trends by Robert D. Edwards and John Magee. Their work emphasized techniques that could be used to identify stock patterns in order to predict future stock prices. The introduction of technical analysis went beyond fundamental analysis that focused completely on financial statement analysis. One of the implications of the new method implied that stock prices moved within a certain range around its true, fundamental value. This concept introduced a totally new trading strategy to financial markets: it became possible to (irrationally) speculate on stock prices, in other words: even when rational investors knew that stock prices were above their fundamental values, it could still be attractive to ‘trade with the stock’, as long as they believed that the prices would grow further.…

    • 4471 Words
    • 18 Pages
    Powerful Essays
  • Powerful Essays

    1) MTA Code of Ethics (attached at the end of this document) 2) Edwards, Robert D. and Magee, John, Technical Analysis of Stock Trends, 9th Edition, CRC Press, Taylor & Francis Group, Boca Raton, Florida, c2007, ISBN 0-8493-3772-0 Chapters: 1. The Technical Approach to Trading and Investing 2. Charts 3. The Dow Theory 4. The Dow Theory in Practice…

    • 1347 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Written by: Allan Loeb and Stephen Schiff (written by), Stanley Weiser & Oliver Stone (characters)…

    • 1333 Words
    • 6 Pages
    Good Essays
  • Better Essays

    Dissertation proposal

    • 1067 Words
    • 5 Pages

    Kim, Myung Jig, Nelson, Charles R., and Startz, Richard, Mean Reversion in Stock Prices? A Reappraisal of the Empirical Evidence, Review of Economic Studies, 1991, 58, 151-528.…

    • 1067 Words
    • 5 Pages
    Better Essays
  • Good Essays

    Since this is a very extensive course I have compiled a list of the most important subjects, those which you should place the greatest emphasis on when studying for the final exam. Please note that this is not an exhaustive list and the final exam may include questions based on topics not directly mentioned below. This list should supplement the questions/problems from the practical sessions – which you should study carefully.…

    • 6327 Words
    • 26 Pages
    Good Essays