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Stock Market and Disk Drive Operations

Stock Market and Disk Drive Operations.
Question: – Why is Seagate undertaking this transaction? Is it necessary to divest the Veritas shares in a separate transaction? Who are the winners and losers resulting from the transaction? Solution: – Seagate is undertaking this transaction to generate significant wealth gains for Seagate shareholders. There is a value gap generates due to Seagate’s VERITAS stake. VERITAS stake value exceeds the entire market capitalization of the Seagate. Seagate faces two problems because of VERITAS stake. First, the company’s core disk drive operations were not receiving full value in the market.
Second, the company would incur a significant tax liability if the company attempt to monetize its VERITAS stake be selling the shares. Yes, it is necessary to divest the VERITAS shares in a separate transaction. It helps the company to save itself from tax liabilities and distributing the VERITAS stock tax free to its shareholders. The Seagate shareholders are definitely winner if the two-step transaction will happen. The shareholders of Seagate get higher value of disk drive operations and tax free shares of VERITAS. The Seagate Management is also winner.
They get rid of tax liabilities related to VERITAS stocks and get full value of disk drive operations. The VERITAS also feel like winner as they get higher number of stocks in exchange of lesser number of stocks. Question: – Does the negative value of Seagate’s operating assets imply markets are inefficient? Solution: – The negative value of Seagate’s operating assets implies that markets are inefficient. The core disk drive operations do not receive its full value in the market. Seagate’s Management thinks that disk drive operations value is larger than what the value is in market.

This shows that markets are inefficient. Question: – Why might a negative value exist? Solution: – Tax liabilities: – The negative value of the Seagate’s operating assets is due to tax liabilities which the company is facing because of VERITAS stocks. Other liabilities : – Fear that managers will destroy value: – The negative value of the Seagate’s operating assets is not due to fear that managers will destroy value. Moreover, the investors have trust in the managers of the Seagate that’s why they want to retain the top management of the Seagate in the newly build company.

Stock Market and Disk Drive Operations

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Overview of the Stock Market

Overview of the Stock Market.
Over the past few years, many millionaires have been created due to the economical explosion of the stock market. The market isn”t just growing, as it did in the mid to late seventies; but it is on steroids, and is growing like never before. Backed by the relentless, yet sometimes spasmodic, growth of the NASDAQ Composite, Wall Street”s impact on the future cannot be denied. For as long as the market has been in existence, drastic changes such as these have never taken place. What awesome power could have produced so much money in so little time?
What colossal force could have caused the United States” economy to flourish? The answer lies in one, simple, recently coined phrase: the tech stock. The stock market has been around since people traded silver for ownership of cargo 200 years ago, yet many people don”t know how it works, or where their money goes when they purchase a stock; they simply think “buy low, sell high. ” Although this is a good basic investment plan, it is imperative that one knows where his money is headed when he buys a thousand dollars worth of a specific stock.
When one purchases a stock, they are actually purchasing part of a company (Brian 1). The reason one would do this is because he wants part of the profits of the company. If one purchases 1% of a company, he will receive 1% of the income, to put it in a simplified manner. The money the company gains from selling their stock is placed back into the company. This way, the company can grow, and produce more profits for the stockholders. The company”s value is represented by the stock price on the stock exchange (Brian 2).

Over time, a method of judging a stock”s performance, called the “profit to earning ratio” was created. P/E is shorthand for the ratio of a company’s share price to its per-share earnings. For example, a P/E ratio of 10 means that the company has $1 of annual, per-share earnings for every $10 in share price (Green 1). ” This ratio basically represents how much money the investor is putting in per dollar earned. This was generally a good thing to look at when choosing a stock to invest in, but the P/E ratio can be misleading, especially in the few tech stocks that have tremendous stock prices, yet have little net profit.
No one knows exactly when the tech stock came about, but it seems like it came all at once. The phrase “tech stock” simply refers to all stocks that deal with any form of technology related, directly or indirectly, to the computer or computer chips. A good portion of the popular tech stocks today deal with the Internet (Brian 4). One reason for this is the easy access by millions of people worldwide. Small companies are able to reach out to the whole globe with just a few bucks, and thus become prosperous over a short amount of time.
Just a few of the most popular tech stock corporations include: Microsoft, Apple, TI, Amazon, Yahoo, and Dell. Companies such as Microsoft, Apple and Dell are companies that handle computers directly, and have been around for a long time (NASDAQ 5) TI creates many semiconductors that are found in most all products that have computer chips in them. Amazon and Yahoo are both directly related to the Internet. These companies are popular due to their originality and business management. However, popularity hardly gains profit, so why is it that Yahoo can make so much money on the stock market?
Surprisingly and ironically enough, it is precisely popularity that causes its gains. Because of the popularity, people continue to purchase Yahoo”s stock. Although the company isn”t making direct profit, it certainly makes a lot of money from the stock purchases, so the company actually makes the money off of the stock market (Brian 5). Rare, indeed, to see this at such an extreme. With all of this success must come organization, and thus is the role of the NASDAQ Composite. Although NASDAQ came about long before the rise of tech stocks, it now represents the growth that they portray.
This is mostly due to the large volume of blue chip Internet stocks that have joined the Composite, as well as the small technical companies that are looking for a big break. Duarte summarizes the whole NASDAQ universe in once sentence; “The NASDAQ is fueled by blue chip stocks and small caps which explode into high-earnings (Technology 1). ” And explode it did. In just over one year, “The Index gained 1876. 62 points and 85. 59 percent for the year. The NASDAQ Composite Index also eclipsed the 3000 and 4000 point milestones during the last quarter of 1999” (Nasdaq 1).
This far surpasses the Dow Jones Industrial, which only gained 25. 22% over the 1999-2000 year. “The market”s best index performers were the computer, telecommunications, and biotechnology up 105. 03 percent, 102. 71 percent and 101. 64 percent respectively” (Nasdaq 2). This obviously displays a growing interest in the tech stock, which has caused this major uprising to occur. One may wonder how the Dow Jones Industrial got off so bad, because, after all, it represents our nations largest companies. For a long time, the Dow Jones Industrial has represented the stock market as a whole, but times change.
One cause of this change is the high interest rates that affect the corporate stocks such as Wal-Mart and ExxonMobil. These stocks reduce in price as a result of this, and therefore, the Dow average reflects the decrease. The Dow Jones blue chips remain stable, but haven”t increased dramatically, and this isn”t sufficient to make up for the losses of the stocks that tanked, such as banking stocks, financial stocks, and oil marketing stocks (Duarte, Technology 1). One thing that everyone wonders is “Is the gold rush over? ” The answer is no, not as of 3-2-00, anyway.
However, all good things must come to an end; the question is when. Milton Friedman and Alan Greenp are both major authorities in Wall Street, and when they speak, the world of investors listens. The one bad thing is this, they usually never agree. In late 1999, Friedman “suggested the current market looks similar to the pre-crash markets in the U. S. in 1929 and the pre-crash market in Japan in 1989. ” Soon after, “Greenp made equally scary remarks about the stock market and the wealth effect” (Duarte, Greenp 1).
These are remarkable authorities in the world of investing, but these notes don”t specifically talk about the tech stock falling. Some people believe that the so-called “crash” that they spoke of has already happened at the turn of the millennium, when both the Dow Jones and the Nasdaq fell at record-breaking volumes. This proved that the NASDAQ wasn”t invincible with its precious tech stocks, but it also started an ugly observation that whatever the Dow does, the NASDAQ does at a more flamboyant rate (Jennings 1).
This simply means that if the Dow goes up a little, the NASDAQ goes up a lot. When the Dow drops a little, the NASDAQ drops a lot (Fool 9). However, there”s no concrete evidence to prove this theory that they are connected somehow. January 4th, 2000; a sigh of relief sweeps the world as nothing too terribly devastating happens on the turn of the millennium. However, this sigh turns quickly into a gasp; at least for those watching the stock market. The Dow Jones plummets nearly 360 points, and NASDAQ plummets nearly 230 points in just one trading day.
The next two days, NASDAQ continues to fall another 200 points, resulting in nearly a 8% drop in just three days. It recovers from this drop in only about two days, only to drop back into a lower pit in three more days. Those who held onto their pocketbooks for this roller coaster ride found a light at the end of the tunnel, and by the end of February, the Composite had climbed to the 4600 mark, 600 points higher than at the beginning of the year (Fool 1). Many other times in the first quarter of 2000 NASDAQ took a hefty fall, but it always regrouped and rallied to surpass it is original price.
Another thing to remember is that NASDAQ isn”t made entirely of tech stock blue chips such as Dell and Amazon (Nasdaq 1). It is also made up of small caps that fail, large caps that fail, and those penny stocks that people get so worked up about… that also fail; so it is hard to judge how well tech stocks are actually doing by looking directly at the NASDAQ Composite or P/E ratios. Tech stocks are still a relatively new thing for the market, and investors haven”t yet predicted their fate.
However, they are still intensely popular, and as long as they are popular, people will keep buying; and, of course, if people buy them, they will raise in value. Technology is not going away any time soon, there”s no doubt about that; the future is now. Computers rule our lifestyle, making everything faster, easier, cheaper, more efficient; and these tech stocks represent our new economy based on this new efficient system. Even though they may not present themselves as strongly as they once did, tech stocks are definitely here to stay.

Overview of the Stock Market

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Macroeconomic Equilibrium and Stock Market Boom

Macroeconomic Equilibrium and Stock Market Boom.
Long-run Macroeconomic Equilibrium and Stock Market Boom
Let us assume the economy reaches its long-run macroeconomic equilibrium in 2020. When the economy is in the long run macroeconomic equilibrium, the stock market will also reach its boom. This will in turn lead to increases in stock prices more than expected, and the stock prices will stay high for some period. Answer the following questions based on the scenarios of long macroeconomic equilibrium and consequent stock market boom.
B) Which curve will shift? Is it AS curve or AD curve? In which direction does the shift occur? The aggregate demand curve will shift right b) In the short-run, what will happen to the price level and output (real GAP)? In the short run both the price level and real GAP will rise.

C) What will happen to the expected price level? What impact does this have on wage bargaining power of workers? The expected price level rises and the bargains are struck for higher wages.
D) In the long-run, which curve will shift due to the change in price expectations created by the stock market boom? In which direct will it shift? It will shift the short run aggregate supply curve to the left.
E) How does the new long-run macroeconomic equilibrium differ from the original equilibrium? The price level is higher and real GAP is the same.
2) Studies indicate that net exports and net capital outflows tend to be equal.
A) Why are net exports and net capital outflows tend to be equal? How does an increase in the price level change interest rates?
The value of produced in any country is always equal to the value of reciprocal Macroeconomic Equilibrium and Stock Market Boom: Unit 8 Answers By multidimensionality alee is also equal to the total amount currency traded in the foreign exchange market over that year, because the buyers in other countries trade in their assets to convert to equivalent amount in the country’s currency, and use this amount to pay for the export products. Interest is the cost of holding money. The more you expect money to be devalued (inflation), the more interest compensation will be demanded. ) How does this change in interest rates lead to changes in investment and net exports? If interest rates were to rise generally businesses would invest less because he cost of borrowing money increases and would invest more if they were to lower the interest rates. Furthermore it affects net exports if it increases because it makes loan available to industries at higher rate so profit margin decreases and this adversely affects export and attracts more foreign investors in bonds/ deposits so currency improves and thus earnings from exports increases and cost of imports decreases.
Decreasing the interest rate would make loans available to industries at lower rate so profit margin increases and this improves export but discourages more reign investors in bonds/ deposits so currency depreciates and then the earnings from exports decreases and cost of imports increases.
3) Assume there is a decrease in the demand for goods and services, which leads to a decrease in the real GAP and eventually the economy into recession.
A) When the economy enters recession due to a decline in demand, what will happen to the price level?
Output and input prices generally fall during recession, while the inflation rate rises during a boom and falls during a recession, it generally does not go below zero due o a consistently increasing money supply.
B) Assume there is no government intervention. What will ensure that the economy still eventually gets back to the natural rate of output (real GAP)? A decrease in aggregate demand causes the price level to fall. If the government takes no action to counter this, then the actual price level will be below the price level that people expected.
Individuals will eventually correct their expectations of the price level. As they do so, prices and wages will adjust accordingly, shifting the aggregate supply curve to the right. For example if wages are sticky, in light of the lower price level, firms and workers will eventually make bargains for lower nominal wages. The reduction in wages lowers costs of production, so firms are willing to produce more at any given price level. Consequently, the short-run aggregate supply curve shifts right. The rightward shift in aggregate supply eventually causes output to rise back to the natural rate.
C ) A number macroeconomic variables decline during recessions.
One of these variables is the GAP.
A) What other variables, besides real GAP, tend to decline during recessions? Given variables which are to be expected. Variables that fall along with real GAP include employment, incomes, investment, sales, and home purchases. GAP may be measured as either the production of, expenditures on, or income generated from final goods and services. It follows that any other variable that could be used to measure production, expenditures, or income will generally move in the same direction as GAP.
B) Empirical studies indicate that the long-run trend in real GAP of the USA has an upward trend. How is this possible given business cycles and macroeconomic allocations? What factors explain the upward trend in spite of the cycles? Besides GAP, during recessions, income, profits and investment declines. The price level of goods and services declines during recessions. The aggregate demand and supply also declines and so does consumer spending and levels of employment. During a recession, the price levels of goods are lower than that expected.
This prompts supply to decline since the profits are low. Thus the aggregate supply goes down triggering a decline in employment levels. This in turn, makes consumers cautious panders and they tend to save rather than spend resulting in decline in the aggregate demand one of the factors to cause the upward spite is the war.
5) Assume there are short-run and long-run Macroeconomic Equilibriums in the economy. Refer to the AS and AD curves above to answer the following questions.
A) What is the initial point of the long-run macroeconomic equilibrium? What are the equilibrium values?
What does the appearance of the long-run aggregate-supply (LARS) curve indicate? How does it differ from AS? The long-run equilibrium of the economy is found where the aggregate-demand rev crosses the long-run aggregate-supply curve (point A). When the economy reaches this long-run equilibrium, the expected price level will have adjusted to equal the actual price level. As a result, the short-run aggregate-supply curve crosses this point as well.
B) What are the factors that can shift short-run aggregate supply curve from ASIA to ASS? What does Point A represent in the graph?
What does point B represent? Is it the short-run or long-run macroeconomic equilibrium? Explain. Shifts in the AS curve can be caused by the following factors: changes in size ; laity of the labor force available for production, changes in size ; quality of capital stock through investment, technological progress and the impact of innovation ,changes in factor productivity of both labor and capital, changes in unit wage costs (wage costs per unit of output) ,changes in producer taxes and subsidies boost wage levels and cause AS to shift inwards.
Related: 
Point A represents long run equilibrium because long-run equilibrium of the economy is found where the aggregate-demand curve crosses the long-run aggregate-supply curve Point B represents short-run equilibrium this is when the economy when the quantity emended of Real GAP equals the (short-run) quantity supplied of Real GAP, where the aggregate demand curve intersects the short-run aggregate supply curve.
C) Assume aggregate demand (AD) is held constant, in the long-run, starting from point B, what will the economy likely experience? Will it reach the long equilibrium? In the long run the economy will experience a rising price level and a falling level of output. It will not reach long equilibrium because Long-run equilibrium occurs at the intersection of the aggregate demand curve and the long-run aggregate supply curve.

Macroeconomic Equilibrium and Stock Market Boom

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The triggering event that led to the Wall Street stock market

The triggering event that led to the Wall Street stock market.
The triggering event that led to the Wall Street stock market crash in October 1929 was the result of a steady decline in production, prices and income over the period of three months. Anxiety gave rise to panic thus resulting to the crash.  The stock market crash affected various countries and the effects were intense.  The depression affected greatly the United States because of the absence of welfare benefits for the laid off workers.  Between 1929 and 1933, money income fell by 53 percent and as a consequence, demand fell significantly, which in turn led to lower production and more lay-offs up to 25 percent rate of unemployment in 1933.
And yet despite the severity of the stock market crash, the Federal Reserve did not pursue a monetary expansion policy which would have stimulated the economy through lower interest rates and increased the stock of money in circulation. As part of the efforts of the United States to cope with the Depression, the Hawley Smoot Tariff of 1930 was enacted which made US more protectionist than ever thereby sending import duties to record highs.  As a result, other countries retaliated as the new tariff act hastened the downfall of American trade volume. Since President Hoover has been protective of the tariff act, he failed to see the results of the move.
Immediately thereafter, the Depression spread through out the world especially in Europe.  Particularly affected was Germany whose economy was unable to cope with the slow disappearance of American capital. It is also worth discussing that Germany was still paying reparations for World War I which made its position even more delicate. Germany was then forced to borrow from Great Britain and France.  The country had to pursue deficienary policies in order to gain the confidence of investors and attract foreign funds.

The problem of devaluation further posed a major problem. Although the United Kingdom was not hit in the same way as Germany, it however experienced a notable decline in its export which was even greater than the decrease in its imports.  Latin America was also greatly affected as it depended heavily in selling raw materials in the US. It could not be surmised that the Wall Street crash was the immediate cause of the decline in world trade.  The decline in world trade was largely due to the protectionist legislation passed by major trading nations.
When Hoover was replaced by President Roosevelt in 1932 and brought with him the New Deal which was intended to provide direct relief, recovery and financial reform to the country suffering from the Great Depression. One of Roosevelt’s primary programs was to deal with the country’s banking catastrophe. Since one-fifth of all of the banks in the US were forced to close and many people were already starting to lose their life savings, Roosevelt asked Congress to legislate a law which will protect the saver’s investment in times of the same crisis. This eventually restored the people’s trust in the banking system. Perhaps one of the most important legislation and mark left by the New Deal is the Social Security Act which set up a national system of old-age pension and also coordinated relief for the unemployed.  Both agriculture and industry were also supported by policies to restrict output and increase input.
Perhaps the most durable  policy left by the New Deal was  the great public works project such as the Hoover Dam and the introduction by the Tennessee Valley Authority of flood control, electric power, fertilizer and education to a depressed agricultural region in the south. However, the New Deal was certainly not a perfect example of economic management as it did not lead to rapid economic recovery.  Income per capita was no higher in 1939 than in 1929, although the government’s welfare and public works policies did benefit many of the most needy people. The big growth in the US economy was, in fact, due to rearmament. (Modern American Poetry)
Despite the promises of the New Deal, it nevertheless reaped various criticisms as the programs were questioned.  For example, the National Industrial Recovery Act of 1933 which was originally intended to make possible “ a great cooperative movement throughout all the industry in order to obtain wider reemployment, to shorten the working week, to pay a decent wage for the shorter week and to prevent unfair competition and disastrous overproduction.” However, the NIRA was attacked because it gave stimulus to the industries that needed it least and ignored the industries that needed it the most. It also gave Roosevelt unprecedented powers over the economy and other businesses.
The increase of criticisms against Roosevelt and the New Deal, Roosevelt was forced to look for support elsewhere.  During the presidential campaign in 1936, he built the “Roosevelt Coalition” a political bloc that made modern politics.  While the Republicans were still relying on their traditional base of political support such as big businesses, farmers and conservatives, Roosevelt and the Democrats turned to small farmers in the Midwest, urban political bosses, even ethnic blue collar workers, the ethnic minorities, Jews and intellectuals.  As evidence by the support of African-Americans, Roosevelt was certainly changing American politics. Thus, it was no surprise that the Democrats won the race in 1936.
On the other hand, labor and labor unions played a great role during the 1930s.  In fact, many Americans became alarmed by the labor union’s power which they felt might be irresponsibly used under certain circumstances.  For the labor force, they are responsible in continuing industrialization although many of the workers are divided from each other ethnically, regionally and religiously.  Nevertheless, with mass unemployment and real distress among the workingmen, public opinion, which had long looked upon unions as “radical” outfits, came to sympathize with their purposes for the first time. Reflecting that public opinion, the new deal Congresses passed laws which favored organization and recognition of labor unions. Meanwhile, the courts, which had taken a restrictive view of the rights of labor when they seemed to conflict with those of private property, rendered more favorable decisions and upheld the new laws.
Reference:
Monique Ebell. (2006). Welfare Capitalism, Union Power and the Great Crash of 1929: Toward a Neoclassical Explanation of the Great Depression.”  XIV International Economic History Congress, Helinski 2006 Session 20.
F. William Engdahl. “Some Conventional Reflections on the Great Depression and the New Deal.” GeoPolitics-GeoEconomics.  Online http://www.engdahl.oilgeopolitics.net/History/New_Deal/new_deal.html accessed October 1, 2006.
Stanley Schultz. “Dr. New Deal Becomes Dr. Win-the-War.” American History 102: Civil War to the Present. Online http://us.history.wisc.edu/hist102/lectures/lecture20.html
Labor and Labor_Management. Online https://www.netsafa.navy.mil/ipg/labor_and_labormanagement.htm  accessed October 1, 2006.
“Legacy of the New Deal in Comparison with Other Deals” : http://www.bergen.org/AAST/Projects/depression/legacy.html

The triggering event that led to the Wall Street stock market

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Revisiting Day of the Week Effect in Indian Stock Market

Revisiting Day of the Week Effect in Indian Stock Market.
In recent years the testing of market anomalies in stock returns has become an active field of research in empirical finance and has been receiving attention not only from academic journals but also from the financial press as well. Among the more well-known anomalies are the size effect, the January effect and the day-of-the week effect. According to this phenomenon, the average daily return of the market is not the same for all days of the week, as we would expect on the basis of the efficient market theory. The objective of this paper is to examine the existence of day of week effect in Indian stock market.
Daily closing prices of S&P CNX Nifty index have been analyzed over fifteen years period commencing from January 1994 to December 2008. A set of parametric and non parametric tests has been used to test the equality of mean returns and standard deviations of the returns. The mean returns on Monday and Tuesday are negative while on Wednesday these are highly positive. Also, the impact of introduction of rolling settlement on the stock returns is observed. The results show that before rolling settlement came in 2001, Tuesday was showing highly negative returns and Wednesday highly positive.
But after the introduction of rolling settlement, the seasonality in the distribution of the mean returns across different days of the week ceased to appear. Thus the markets have become more efficient over a period of time. KEY WORDS: Market Efficiency, Calendar Anomalies and Day-of-the-Week Effect INTRODUCTION A Stock Exchange is a common platform where buyers and sellers come together to transact in securities. It may be a physical entity where brokers trade on a physical trading floor via an “open outcry” system or a virtual environment.

The Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) are the India’s two leading stock exchanges. Indian security market is one of the oldest markets in Asia. It has come a long way from earlier days of floor trading to the present day screen and net based trading. This study is an attempt to have a deeper insight in to the behaviour and patterns of stock price distribution in the Indian stock market. The price of a security should vibrate around its intrinsic worth in any efficient market.
In finance, the efficient-market hypothesis (EMH) asserts that financial markets are “informationally efficient”, or that prices on traded assets, e. g. , stocks, bonds, or property, already reflect all known information. The efficient-market hypothesis states that it is impossible to consistently outperform the market by using any information that the market already knows, except through luck. Therefore, the past price movements can in no way help in speculating the prices in future. The price of each day is independent. It may be unchanged, higher or lower from he previous price, but depends upon new pieces of information being received each day. So seasonalities cannot be used to formulate trading strategies to earn abnormal returns according to efficient market hypothesis theory. Calendar anomalies are cyclical anomalies in returns, where the cycle is based on the calendar. It describes the tendency of stocks to perform differently at different times. For example, a number of researchers have documented that historically, returns tend to be higher in January compared to other months (especially February).
There are three types of efficiencies as explained in efficient market hypothesis. So calendar anomalies mainly explain weak form of efficiency which says that previous price changes or changes in return are useless in predicting future price or return changes. Some of the calendar anomalies are Month-of-the year effect, Month-of-the quarter effect, Week-of-the month effect, Day-of-the-week effect or Weekend effect, Monday effect, Hour-of-the-day effect or the End of the-day effect, holiday effect and turn of the month effect etc. Among them the day-of-the-week effect is most widely documented across the countries and markets.
In context to stock market the majority of research findings, indicates that the stock returns remain low or negative on Monday. This paper examines the day-of-the-week effect in Indian stock market, using S;P CNX Nifty data of last fifteen years from January 1994 to December 2008. REVIEW OF LITERATURE There is an extensive literature on the day-of-the-week effect in the stock returns. This section examines a few research works on the day of the week effect in Indian and international stock markets. Ziemba (1993) investigated the weekend hypothesis for the Japanese market using daily data from 1949 to 1988.
Tuesday recorded negative returns following a one day weekend and Mondays declined after two days weekends. Balaban (1994) found day of the week effect in an emerging stock market ISECI of a developing country Turkey for the period 1988 to 1994. Highest returns on Friday and lowest returns on Tuesday were observed. Mishra (1999) studied day of the week effect in Indian stock market using Sensex and Natex for the period 1986 to 1998 indicating the presence of day of the week effect in Indian stock market. Friday returns were found highest and significantly different from the mean returns of other days. Hence there exists a Friday effect.
Berument and Halil Kiymaz (2001) tested the presence of the day of the week effect on stock market volatility by using the S;P 500 market index during the period of January 1973 and October 1997. The findings showed that the day of the week effect is present in both volatility and return equations. While the highest and lowest returns were observed on Wednesday and Monday, the highest and the lowest volatility were observed on Friday and Wednesday, respectively. Further investigation of sub-periods reinforced findings that the volatility pattern across the days of the week was statistically different.
Sarma (2004) examined seasonality across the days of week in Indian stock market using BSE indices- SENSEX, NATEX and BSE 200. Highest variance on Monday was found and weekend effect was confirmed by this study. Nath and Dalvi (2004) examined the day of the week anomaly in Indian stock market for the period from 1999 to 2003 using index S;P CNX NIFTY data. The study found that before introduction of rolling settlement in January 2002, Monday and Friday were significant days. However after the introduction of the rolling settlement, Friday became significant. Mondays were found to have higher standard deviations followed by Fridays.
Davidsson (2006) found evidence of day of week effect in S;P 500 index. Davidsson found Wednesday was the weekday with highest rate of return and Monday was weekday with lowest rate of return. Also Monday was the only day with negative rate of return. Wednesday’s returns were found approximately four times of Monday’s returns. Badhani (2008) examined the presence of day-of-the-week effect on stock returns, trading volume and price volatility at the NSE during the period of 10 years from 1995-2005. Wednesday effect was found during earlier weekly settlement regime which now disappeared.
Monday and Tuesday returns were consistently low but during recent sub period these were not significantly different from other days of week. Also on Monday the average trading volume was significantly low and price volatility was high consistently across the entire sample period. Mangala (2008) examined day-of-the-week effect in sub periods in Indian stock market using S;P CNX Nifty data. Highest returns on Wednesday and lowest on Tuesday were observed. Also findings showed that seasonality in return distribution across weekdays was confined to pre rolling settlement time period; thereafter seasonality vanished.
DATA AND METHODOLOGY This study covers a sample period of fifteen years from January 1, 1994 to December 31, 2008 comprising a total of 3695 observations(days). The stock prices are represented by S;P CNX Nifty index. The closing values of this index have been obtained from the official website of National Stock Exchange (www. nseindia. com). There was trading on certain weekly closing days (i. e. 18 Saturdays and 3 Sundays); these days have been excluded from the sample. During the above sample period of fifteen years many structural changes also took place in the market.
For example rolling settlement was introduced in place of weekly settlement system. Therefore, the behaviour of stock prices has been studied on an yearly basis so as to gauge the impact of these changes on the stock prices. Measuring the Daily Returns Daily percent return on the index for a given day of the week has been calculated by subtracting the closing price of the previous trading day from closing price of that day, then dividing the resulting no. by closing price as on the previous trading day and multiplying by 100. Rt = Pt-Pt-1 * 100 Pt-1 Rt is daily return on the share price index for day t
Pt is the closing value of index for the day‘t’ and Pt-1 is the closing value of the index for the preceding day. Hypothesis and Testing Procedure The null hypothesis is that there are no differences in the mean daily returns across the weekdays. The non parametric Kruskall- Wallis (H) test has been applied to test seasonality in returns across weekdays to test the hypothesis. Null hypothesis is: – Ho: µ1= µ2= µ3= µ4= µ5 Here, µ1, µ2…µ5 represent mean returns of different trading days of week. It means that mean returns across all the five days of week are equal. Alternative hypothesis is: – H1: µ1? µ2? µ3? µ4? µ5
It implies that there is significant difference in mean returns across the trading days in a week. Different statistical tools have been used to find the results like mean, standard deviation, range, skewness ; kurtosis etc. Then the most scientific and logical non-parametric Kruskall-Wallis (H) test has been applied to check the hypothesis. The Kruskall Wallis test requires the entire set of observations being ranked – higher the value, higher is the rank and vice-versa- then arranged into nj ? 5 matrix where nj represents the rank of the return and columns represent the day of the week (Monday through Friday).
The value of H is calculated by formula: |H |= |12 |( |[pic] |(Rj)2 |) | —  |3(N+1) | | | |[pic] | | |[pic] | | | | | | |N(N+1) | | |nj | | | | | | | | | | | | | | Where: Rj= sum of ranks in the jth column nj = number of cases in the jth column N = sum of observations in all the columns The calculated H value has been compared with the table value of the chi-square(? 2) distribution with (k-1) degree of freedom, where k stands for the number of trading days in a week.
Hence H0 is rejected if H;gt; ? 2 H0 is accepted if H;lt; ? 2 The value of H in our study is taken as the critical value at 1% as well as 5% level of significance. Further Dunn’s multiple pair comparison test based on rank matrix built in K-W test has been used to find seasonality by a pair wise multiple comparison procedure. It identifies whether particular day of the week differs from other days of the week. The test procedure relies on Kruskall-Wallis rank sum Rj. The data in the rank-day matrix prepared for ‘H’ test is used for this purpose. For a given level of ? decide ? µ ? ? if |Ru-Rv| ? Z [? /k(k-1)] [N(N+1)/12]1/2 [1/nµ + 1/nv]1/2 Where, µ = 1, 2……k-1 v= +1,……. k k = 5 N = total number of observations nµ = corresponding number of observations in the uth column nv = corresponding number of observations in the vth column Ru = Average K-W rank sums in the uth columns of the rank matrix Rv = Average K-W rank sums in vth columns of the rank matrix Z[? /k(k-1)] = the upper percentage point of the unit normal distribution for a given significance level for 99 percent confidence level is 2. 575 Further the returns have been analyzed for two sub-periods i. e.
Sub period-1 before rolling settlement (weekly settlement period) ; sub period-2 after the rolling settlement was introduced. In weekly settlement time period, Tuesday used to be as the settlement day on NSE. In 2001, rolling settlement was introduced which shifted settlement cycle from a fixed day of the week to fixed settlement lag. Tuesday settlement might be the possible reason for the observed seasonality in stock returns. DATA ANALYSIS Here the day of the week pattern of the S;P CNX Nifty data from January 1994 to December 2008 has been tested, results of which have been depicted in Table 1.
It is observed from the table that the mean returns on Monday i. e. -0. 08563 percent are minimum followed by Tuesday. Mean returns on Wednesday, Thursday and Friday are positive out of which Wednesday’s return with 0. 303 percent is maximum across all the days of the week. The mean return on Wednesday is about 8 times the overall mean return. The variation in mean returns measured in terms of standard deviation is found maximum on Monday (1. 870303 percent) followed by Friday (1. 740897 percent). It shows that trading on week start and week end is more volatile than other days of week.
Skewness is positive only on Wednesday while other days of week have negatively skewed distributions. Kurtosis tells us the extent to which a distribution is peaked or flat topped when compared with a normal curve. The return distribution on Monday, Tuesday and Friday is leptokurtic while on Wednesday and Thursday are platykurtic. Through table it is also observed that range on Monday is highest which is also a measure of Dispersion. There is a significant difference in mean returns across different the different days of the week as evident by K-W (H) statistics (21. 78) which is highly significant at 1 percent level of significance. Therefore the null hypothesis of equality of mean returns across various days of the week stands rejected. |Table 1. Summary Statistics of Daily Stock Returns of S;P CNX Nifty(Jan 1994-Dec. 2008) | |  |Monday |Tuesday |Wednesday |Thursday |Friday |All Days | |Mean |-0. 08563 |-0. 07615 |0. 30300 |0. 1895 |0. 03221 |0. 03838 | |Standard Deviation |1. 87030 |1. 50858 |1. 62655 |1. 55153 |1. 74090 |1. 66944 | |Skewness |-0. 71612 |-0. 15909 |0. 40400 |-0. 05609 |-0. 35999 |-0. 24662 | |Kurtosis |4. 29741 |4. 47636 |1. 79652 |1. 53957 |5. 66062 |3. 98682 | |Range |7. 54838 |8. 29523 |7. 9590 |6. 30507 |7. 83089 |20. 53297 | |No. of Observations |741 |742 |740 |744 |728 |3695 | |K – W(H) Statistics 21. 278* | * Significant at 1 percent level for 5-1 degrees of freedom Table 2 represents actual and expected multiple comparison values as per Dunn’s multiple pair comparison test to study pair wise comparison among different days of the week. This test is based on rank matrix built in Kruskall Wallis Test.
The calculation of actual and expected values is shown in table 3 while the deviation of actual from expected ranks is shown in table 3. So it is observed from the table 3 that there is inequality in Monday – Wednesday, Tuesday – Wednesday, Wednesday – Thursday and Wednesday – Friday pairs as these are showing positive deviation of absolute rank sum values from the corresponding Z value or expected value. It means these pairs are showing more inequality in returns than expected and Tuesday – Wednesday is showing highest positive deviation. Also it is observed from the table that Wednesday appears in all above pairs.
It means Wednesday returns are significantly different from the other days of week. Wednesday is showing highly different mean returns from rest of the days. So a trading strategy of buying on Tuesday and selling on Wednesday may help an investor to earn abnormal returns. |Table 2. Actual and Expected Multiple Comparison Values | | | |  |Actual |Expected | |  ||RU ?
Rv| |Z |[N(N+1)/12]1/2 |(1/nu+1/nv)1/2 |Z[N(N+1)/12]1/2 (1/nu+1/nv)1/2 | |Monday-Tuesday |40. 64 |2. 575 |1066. 799 |0. 0519 |142. 6521 | |Monday-Wednesday |197. 07 |2. 575 |1066. 799 |0. 0520 |142. 7620 | |Monday-Thursday |30. 38 |2. 575 |1066. 799 |0. 0519 |142. 5697 | |Monday-Friday |50. 24 |2. 75 |1066. 799 |0. 0522 |143. 3388 | |Tuesday-Wednesday |237. 71 |2. 575 |1066. 799 |0. 0520 |142. 7070 | |Tuesday-Thursday |71. 02 |2. 575 |1066. 799 |0. 0519 |142. 5147 | |Tuesday-Friday |90. 88 |2. 575 |1066. 799 |0. 0522 |143. 3114 | |Wednesday-Thursday |166. 69 |2. 575 |1066. 99 |0. 0519 |142. 6246 | |Wednesday-Friday |146. 83 |2. 575 |1066. 799 |0. 0522 |143. 3938 | |Thursday-Friday |19. 86 |2. 575 |1066. 799 |0. 0521 |143. 2015 | |Table 3. Deviation of Actual from Expected Rank Differences | |Monday-Tuesday |-102. 12 | | | |Monday-Wednesday |54. 308 | | | |Monday-Thursday |-112. 190 | | | |Monday-Friday |-93. 099 | | | |Tuesday-Wednesday |95. 03 | | | |Tuesday-Thursday |-71. 495 | | | |Tuesday-Friday |-52. 431 | | | |Wednesday-Thursday |24. 065 | | | |Wednesday-Friday |3. 436 | | | |Thursday-Friday |-123. 41 | | | Table 4 represents the yearly distribution of mean returns on S;P CNX Nifty for different days of the week from 1994 to 2008. Also to test whether these differences in the mean returns on different days are statistically significant or not, the non parametric ‘H’ statistics has been used. The table value of the chi-square (? 2) distribution at 1 percent level of significance is 13. 277 and at 5 percent level of significance is 9. 488. If we look at year wise KW statistics, up to year 1999 ‘H’ statistics is highly significant and after 1999 it is insignificant. |Table 4.
Yearly Distribution of Mean Returns on S;P CNX Nifty by Day-of-the-Week | |(January 1994 – December 2008) | | | | | |Year/Day |Monday |Tuesday |Wednesday |Thursday |Friday |KW Statistics | |1994 |0. 47012 |-0. 16573 |-0. 36687 |0. 01075 |0. 32745 |9. 945** | |1995 |-0. 51580 |-0. 33583 |0. 25709 |-0. 6627 |0. 11756 |11. 145** | |1996 |-0. 35599 |-0. 35342 |0. 53600 |0. 18662 |0. 07796 |10. 114** | |1997 |-0. 46253 |-0. 14396 |1. 04706 |-0. 16222 |-0. 06761 |19. 917* | |1998 |-0. 12914 |-0. 52606 |0. 78280 |-0. 15417 |-0. 22507 |13. 245** | |1999 |-0. 00553 |0. 07532 |0. 98097 |0. 10327 |-0. 00305 |14. 48* | |2000 |-0. 16997 |-0. 28629 |0. 49777 |-0. 10239 |-0. 16992 |4. 989 | |2001 |-0. 21325 |0. 11775 |0. 30553 |0. 08010 |-0. 60214 |4. 987 | |2002 |0. 00508 |-0. 15830 |-0. 05939 |0. 07054 |0. 22584 |4. 226 | |2003 |0. 15214 |0. 13598 |0. 26208 |0. 13987 |0. 38014 |2. 323 | |2004 |-0. 4126 |0. 26824 |0. 04482 |0. 02138 |0. 07889 |1. 236 | |2005 |0. 29696 |0. 04875 |0. 02291 |0. 08195 |0. 18711 |1. 806 | |2006 |-0. 09098 |0. 01140 |0. 22203 |0. 22753 |0. 33653 |1. 198 | |2007 |0. 24310 |0. 32425 |0. 02874 |0. 30801 |0. 02442 |2. 139 | |2008 |-0. 36369 |-0. 13064 |-0. 04547 |-0. 5441 |-0. 24632 |1. 46 | | All Years |-0. 08563 |-0. 07615 |0. 30300 |0. 01895 |0. 03221 |21. 278* | | | | | | | | | |*Significant at 1% level | | | |**Significant at 5% level | | |
Further entire study period has been divided into two sub periods: Period 1 (January 1994 to Decemeber 2001) and period 2 (January 2002 to December 2008). Period 1 represents the time when weekly settlement was operational and during this time frame NSE had fixed settlement day – Tuesday. Period 2 represents the time period when rolling settlement was introduced in place of weekly settlement cycle. | | | | | | | | |Table 5.
Mean Daily returns on S;P CNX Nifty by Day of the Week for Sub-Periods | |  |Monday |Tuesday |Wednesday |Thursday |Friday |KW Statistics | |Subperiod-1 |-0. 17276 |-0. 20228 |0. 50504 |-0. 01304 |-0. 06810 |42. 752* | |Subperiod-2 |0. 00197 |0. 05294 |0. 09734 |0. 03923 |0. 12735 |2. 84 | | | | | | | | | | | |*Significant at 1% level | | | It is analyzed from the above table that in sub period 1 (1994 to 2001) all days except Wednesday gives negative rate of return. This is clearly the impact of Tuesday settlement that returns on Tuesday are lowest and on Wednesday it is highest positive. It means beginning of settlement cycle ives maximum returns while last day of settlement cycle called settlement day gives lowest returns. Also a very high value of KW statistics i. e. 42. 752 represents a high degree of seasonality in sub period 1 (before rolling settlement time period). To bring more frequency in the transactions and to bring Indian markets at par with the international markets rolling settlement on T+5 basis was introduced in December 2001. So in sub period 2 when rolling settlement was introduced, returns on all the days have become positive and Friday is giving maximum returns and Monday is giving lowest returns.
This hints towards the presence of some sort of weekend seasonality. But the value of ‘H’ statistics is very low i. e. 2. 684. From this it can be inferred that the return distributions are not significantly different across the week days and the null hypothesis stands rejected in the sub period 2. Thus it may be concluded that with the introduction of rolling settlement on NSE the stock markets have become more efficient. CONCLUSION During the period 1994 to 2008, S;P CNX Nifty index recorded highest positive returns on Wednesday and most negative returns on Monday with highest volatility on Monday and Friday.
It means week start and week end tend to be more volatile in Indian stock market. Also it has been analyzed that Wednesday is giving significantly higher returns than other days of the week which points towards the existence of Wednesday effect in Indian stock market. There was presence of day of the week effect in pre-rolling settlement period which gradually phased away with the introduction of the rolling settlement. Markets have become efficient after rolling settlement has been introduced.
So in present scenario we can’t rely on a trading strategy formulated on the basis of historical return movements on different days to earn abnormal returns as seasonality has disappeared in the recent years of the study period.

Revisiting Day of the Week Effect in Indian Stock Market

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Efficiency and Inefficiency of The Global Stock Market

Efficiency and Inefficiency of The Global Stock Market.
The perception of efficiency is middle to economics. First and foremost, the term efficiency is used to explain a market in which pertinent in sequence is confiscate into the price of monetary assets. This is the main focal point of the research appraisal here.

Occasionally, though, economists use this word to refer to ready efficiency, highlight the way resources are working to make easy the operation of the market. The majority of this appraisal is concerned by the meaning, that is the informational efficiency of monetary markets. At the end of this research, we also believe the microstructure of monetary markets (Dimson, Elroy 2001, pp. 197-226).

2. Practically inefficient
No doubt The efficient procedure of price strength of mind can be contrasted with an incompetent market, in which, according to the hypothesis, the pre-conditions for efficient cost (ideal information, lots of minute market participants) have not been assemble and value may be determined by issue such as insider trading, institutional buying power, propaganda, panic and stock market bubbles and further collective cognitive or touching behavioral biases.
Generally, the majority of the mature markets, such as those of the North America, West Europe and Japan, are close to the efficient end, as those recently growing markets, such as those in South America, Eastern Europe, Africa and the majority of the Asian area, are closer to the inefficient end, or even subjugated by inefficiency.
3. China as a special version footnoting this theory.
China’s securities market overview.
Wang Sen, Li Jingping and Liu Xin from Shanxi University of Finance, China, once conducted a data-analysis, where Shanghai Stock Index used as price moving curve was compared with the payoff curve calculated through the weighted average of stocks’ payoffs.
An interesting finding was that, even though the Index moved violently, the corresponding payoff level was fairly stable. In another word, it seems that the price movement of a stock has nothing to do with its immanent value, which is against classic finance theories (Elroy and Massoud Mussavian 2000).
Macro-Economically
Needless to say, a country’s securities market is far more delicate and sensitive than the overall economy of that country. That could be the reason why the securities market is called the forerunner or the indicator of national or, nowadays, global economy.
And that could also be the reason why centralized management in a planned economy won’t work for securities market (even if it does for the whole economy for the time being): the system is just too complicated and chaotic to be centrally or planned.
All these largely explain one of the weird things in China: the securities market has lost its identity as the indicator for the national economy. For the last twenty years, China’s economy has developed at an incredibly fast pace, while its securities market also deteriorates with ridiculously huge downfalls.
As shown the charts below, China’s economy growth rate has been gradually decreasing from as high as 14.2% in 1992 to 7.1%-8% after 1998. However, the stock index as shown below is more like suffering from a crash landing on thin ice. It’s radically a different story than the country’s economic growth tells.

Efficiency and Inefficiency of The Global Stock Market

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What I Learned from My Stock Market Simulation Experience

What I Learned from My Stock Market Simulation Experience.
What I Learned From My Stock Market Simulation Experience The stock market simulation has been a wonderful experience for me as a student in economics and as a person in today’s society. Knowledge gained in this project will give me the advantage to wisely choose the correct stock when I start investing my own money into the stock market. Different aspects of the simulation provided innovative and diverse ideas to propel me familiarity further into the grand realm of economics.
When first assigned with the project I struggled a little on how best to allocate my funds into the best companies that would steady gain and gain through out the ten week period. Honestly I think I made a wise decision and used a financial advisor, Shibs, on which stocks seem to be rising in the troubled times we are in. With that aid I was able to deduce that WFC, JNJ, and XLF would produce the best results in the time given. Taking that step and using an outside source to assist in the determination of stocks is a fine example of everyday situations.
As always I found a way to express my individuality by seeing that eBay would give me an extra boost in standings with its ever climbing ascension. In looking for research I found out more on other companies that affected mine including my own; this gave me a broader view on where and how fast the market was going. Those articles also provided information on how the different companies I had invested in functioned; I learned that each company is more that meets the eye.

Those clues provided insight in how fear and greed can sway the market back and forth resembling a see-saw never balancing but going good one minute to falling down the next. Besides that insight I learned a very valuable lesson in how one little paragraph in a article can make all hell break loose; it seems that when some hear just one little phrase they start running around like chickens with their heads cut off and making dumb mistakes left and right. Most of all, I learned that patience wins out and that the slow risers in the stock market will be out the day trades.
In putting together this binder I also learned some things about investing and the mechanics of the stock market. One thing was that keeping order among all the essays, articles, graphs, and what not helped keep track of different trends in the various sectors that I had invested in. Also watching how my classmates invested and where they ended up in the rankings gave me the opportunity to see where different tactics succeeded or flopped around doing nothing. Finally, writing this essay gave me the chance to peel back the different layers of the stock market and how my investments truly benefitted.

What I Learned from My Stock Market Simulation Experience

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ISO Android and Windows Comparison

ISO Android and Windows Comparison.
A lot of people are confused when it comes to phones/electronic devices and their operating systems on their device, ISO android and Windows are the most important competitors when it comes to operating systems on different phones. Software that operates our phones is called the Mobile Operating Systems/ Mobile SO. Phone operating systems do not have to be made by one company; instead they are being made by several companies grouped.
For example devices that run under Android are grouped together these SO are all made by Google, Devices that operate with ISO are made by Apple, and devices that operate with Windows are made by Windows. I work in sales of phone and tablet. What do I want to sell my consumer; Android, ISO or windows devices? Well this can be different for each consumer depending on their needs. I always look for my customer ‘s preference when it comes to operating systems and from their I can push the right product to the right consumer.
Another factor that matter is the cost my consumer is looking to spend… There is a perfect intention going on between these three major SO developers; as a result, this competition benefits the consumer in many ways. First is the price range they can pick from; second is the quality of the product and third is the model of the device using that specific SO and so on. I am enjoying this business because of the markets competition and the development of many different SO and devices (Technology is ruling the world).

Working in technology field benefits me in one major way; I am always up-to-date on what comes out in the market and how the companies develop their operating system that fits their business the best. This makes me be one of the first to get a Job when looking for one. Windows is the most known in the market for its long existence in our market. Most companies and their devices have been using Windows 95 to windows 7 (latest SO), but does the existence matter these days?
After researching I have discovered that businesses look for time efficient software, or in other words we can say that businesses are looking for something that requires less maintenance with high productivity. Windows has failed in that matter. Their SO has been failing along with crashes requiring high maintenance. For example CPA updates their Computers regularly because Windows is not following the technology as quickly compared to its competitors, isn’t that time consuming Job? Yes it is time consuming along with time comes money. Now we have talked about CPA and its computers/SO.
Let me now talk about how they perform in the phone industry. They have lost lots of money in creating phones operating under Windows SO. Their phones are not user friendly. First, their Windows phones do crash regularly; which scares most of us, we don’t want to be typing a text massage and before you know it reboots. This is caused by a weak software development. Second, how many phone applications do Windows offer their consumers? Well I can answer you confidently; they are behind with lots of applications compared to ISO and Android.
All together this led to loss of lots of customers; along with that Windows had and still have a loss in the stock market over the past couple years. My personal opinion, I would not purchase any windows device neither would I invest in their stocks. I am not seeing any improvement in their products so I don’t encourage anyone to invest in it. Even though they are doing better in their stocks I don’t see bright future for this company. Google has grown ridiculously over the past couple years. They started with creating search engines to buying over major websites like Youth and android SO.
Let us focus more on the SO of Google ‘Android’ Google purchased android SO in 2005 to create a big market for android smart phones; which they were successful in doing so. Over the past 6 years they have made sure that most phone manufactures use their SO for their devices as well some of computer/tablet manufactures are stepping over to android SO, but sadly they haven’t been as successful in creating demand in he market, I do believe in their product and they will eventually come up with something that will make businesses and other consumers step away from windows.
Their biggest competitor is Apple (android). Android has won made major changes in the phone industry creating a big demand for android devices, a par of these devices are phones and tablets. Over the past years android has been successful in creating an open source SO; meaning that everyone can create an application and put it in their android market for consumers to download. Reason behind creating an open resource SO is that it becomes attractive to each individual, now you can download any application that fits you the best without it being filtered by Google.
You might question yourself now; is an open source attractive to businesses as it’s attractive to other consumers? The answer to that is NO, when you are having an open source you have a leak of security in business privacy. That is a main reason for companies to choose another SO over android; not a major issue for Google because they are trying to target the smart phone industry over major businesses and the use of PC’s within businesses and other computer users. Now that I have explained what Google (android) let’s talk about their stocks.
Their stocks has been improving along with their SO sales, Android SO is getting to a high demand in the smart phone industry. Their biggest competitor is Apple ISO these two companies I would definitely invest in their stock market because each is targeting the highest consumer demand in our telecommunication industry. We are being depended to our smart phones and other electronic devices that these companies will succeed in some way (android & ISO). Android stock has gone up with 4. 01% over the past 5 years (reporting Nasdaq).
ISO (APPLE) is a preferred SO in the many businesses and that’s why their stock has been going up for the past 5 years. Businesses have been changing their SO to ISO and that’s the reason why their stock in the market has been improving yearly; it’s a good choice to invest in Apple now since they are winning the competition not in price but more in quality of their software and a perfect customer service that is there to help you whenever you need them 2417. Now we can tell that the consumer that’s choosing this product did not really go after the price range but more likely is going after the service and quality.
Apple is growing fast since their Apple Phone and its accessories; example, Apple TV, Phone/ tablet docks and so on. Apple is more focused on how they can be the most efficient in business as well they made their SO the most secured; reason behind this is a closed source; meaning, no one can add or enter their application market place without being filtered by Apple. From a consumer stand point; consumers are looking for something that is durable and easy use.

ISO Android and Windows Comparison

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Stock Market essay

Stock Market essay.
Stock market is the place were all stocks and other securities buy and sell. Pakistan have three main stocks markets (KSE, LSE, ISE).Among these stock exchanges Karachi stock exchange founded on 18 September 1947.it was the largest stock exchange in Pakistan and oldest in the south Asia. its growing day by day.
Many ups and downs are occurring in KSE due to political instability, securities threats and macro-economic issues but due to negative issues. its show a positive progress. Two types of KSE,100 and KSE 30 index. KSE 100 index rapidly growing in Pakistan indexes. 2013 is the best year in history of stock market in Pakistan on December 31 (25,261) points are occur which are great achievement.
Top five companies in KSE 100 index are be capitalize and weight age.No Company Names Weightage % Market capitalism (PKR) in Million1 OGDCL 14.14 550,948,930,0002 MCB 7.17 279,583,150,0003 BOP 5.43 211,726,900,0004 Pakistan petroleum 5.06 197,201,080,0005 Standard chartered Bank 4.41 171,704,800,000

Literature Review: According to researcher’s stock market in country play a vital role in economy growth. Many factors that have an impact on stock market. These factors may decrease the performance or may increase the performance. Government of every country should encourage these factors may increase the performance and should discourage these factors that have diverse impact on stock market.
A study many articles and every paper about these factors but found that interest rate has a negative impact on stock market. Interest rate also decrease the efficiency of stock market.Davidson (1996) focus the relationship Between both variables and use regression analysis to define the relationship. He found that important impact of interest rate on stock market. his results are focus on long term interest rate that are play fundamental role in price dividend ratios.
Knut (1996) he found that those countries with less interest rate has strong market as compere to who have high interest rate. He also says that develop countries having low rate that’s way its market is extra ordinary.Kellen (2000) worked develop markets (south Africa, Zimbabwe) he says that in this market high interest rate think to huge loss market and its prices. After study the markets he found that relationship is negative in both variables.
Hosing (2004) find out variables have different impact on each other. variables were interest rate, exchange rate and stock market. but at the end he found that negative relationship between interest rate and stock market.Zoran (2005) worked with macro factors i.e. World War II and he also found opposite relation between both variables. He also focused on cycle’s research. For example: ten to fifteen years etc.Salahuddin (2009) study two factors that can impact on country growth and reduction.
These factors are interest rate and stock exchange. Salahuddin investigate about these variables and he found that both variables have negative impact on each other.Zahid (2010) also study macro variables and stock market index and found that interest rate and inflation has negative impact on stock market.

Stock Market essay

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Stock Market Assignment

Stock Market Assignment.
I will be watching my shares closely so that I can make a choice to sell, buy or hold my shares 3i Group Established in 1945, is one of the UK’s biggest investors in private companies, it says its strategy is to go for early-stage growth companies rather than the financial wizardry favored by other ventured capitalists. It has been a big investor in technology companies in the past. The reason why I chose this company is that I followed the advice given to me in the lecture to not pick companies that I am familiar with. This chart shows the behavior of the share price over 6 months. I will undertake an analysis of BP.
I have already invested 11,300 at a share price of  5. 65. The Beta for this company 0. 89 which is less than 1. This means that the security will be less so I may not make a profit on my return so there is a bit of a risk. BP Oil giant BP moved into the bracket of oil companies in the late nineties, with the acquisition of US concerns Amoco and Atlantic Richfield. More geared to oil production and exploration than its main rivals. BP has moved into the former Soviet Union to secure future production as its current key asset in the North Sea and Alaska wind down. The reason why I chose this company was because petrol prices have been going up, at one stage the price for a liter was less than?  So I am taking a risk with this one but I am hoping it will turn out that I have made some profit with the choices I have made. This chart shows the behavior of the share price over 6 months I will undertake an analysis of Sainsbury’s. I have already invested? 780. 00 at a share price of ? 3. 39.
The Beta for this company is 0. 5 again this is less than the security risk is going to be high with this company. I will keep a close eye on the share price if it falls I may have to sell my shares at the right time so I do not make a loss. Sainsbury’s J Sainsbury’s UK supermarket group was originally founded in the Drury Lane in London 1869. The group began life as a listed company in 1973 which at the time was the UK’s largest-ever flotation the group has moved into financial services chose to invest in this company because the public needs to purchase food it is a need not a want. There are many competitors out there such as Tesco and Asda, which would have been an obvious choice for me, but again I thought I would take a risk and go for a company that I do not shop in.

I decided I was going to buy some shares from this company. I checked on another day and the shares had dropped, so I thought maybe Sainsbury’s is not the right company to choose. I chose it because it may be going up and down but may end up as a winner. Tesco, Asda, and some other competitors were on watchdog about flat-packed bikes; this program may affect their Christmas sales. In this entry, I will undertake an analysis of Prudential. This is the largest investment I have made but I believe it is the best one and I will make a return on my investment. The Beta for this company, so this proves I will make a return on my investment nevertheless there will be more of a higher risk, that I am willing to take. Prudential Insurance Group Prudential is one of the UK’s largest life insurers. It has operations around the world, in the UK, US, and Asia. As well as providing financial services under its own name the Prudential also owns M+G Investment.
I chose this company because I thought it would be a good investment and I will make a profit. I have invested over  25,000 in this company as I am hoping to make a good return on my money. With all the companies that I have invested my money. I was going to set up a spreadsheet in excel but I noticed on a digital look that you can create a profile with how much shares you bought, the date, and how much per share. Once this information is entered it will let you know how much money you have lost that day.
For the second submission, I will not continue with this as I would rather set up a spreadsheet in my reflective log and use different formulae to work out whether I have made a profit or loss. The second submission for the Fantasy Stock Market Game On I read in the Metro newspaper that Sainsbury’s has reported an 18. % rise in profits in the past six months but warned sales could slump in the next half. The grocery chain posted healthy profits of  307m after like for like sales rose 5. 7% in October. The share price rose two percent after the profit figure bettered Sainsbury’s emerged as a winner in the recession as it tempted customers away from Tesco and other competitors, this was led by the advertisers (fed family for a fiver). Sainsbury’s confirmed that market growth was likely to slow in the future as sales surge comes to an end.
According to researchers at Nielsen Sainsbury’s sales increase was the lowest out of the big four chains. Sainsbury’s face a tougher challenge to maintain the sharp rises in the sales seen over the past year as food prices ease back and are expected economic recovery curves. Sainsbury’s are hoping to compete in other areas as food sales came under pressure. I was willing to take a risk as risk is associated when investing money. On the BBC news, Sainsbury’s said they will not be able to generate sales growth like last year because of inflation.
40p which is 0. 03% decrease. With this information that I found out, I decided to sell my shares, and the share price was again  3. 39. I bought 2000 shares this equals to 6780. 00. I haven’t made a loss as when I originally bought my shares the share price was the same.
The other three companies have been doing well since I sold my Sainsbury’s shares, they have been up every day. On I had made a profit of  380, which I was pleased about. The share prices have fallen, nevertheless, I am confident the three companies will make me a profit. Reflective Log Spreadsheet This is a part of my reflective log spreadsheet that I have been keeping so far to show I have been keeping an eye on my shares, the share prices, and whether I am making a profit or a loss. Looking at this Table I have made a loss of  240 (3i group) comparison with the original amount I have made a profit of  500 with BP and with Prudential I have made a profit of 720. Comparison of the chosen companies with their competitors BP Competitors Chevron and Texaco merged in 2001 creating the 2nd largest US-based energy company and the 5th largest in the world. BP has signed its first big oilfield development contract.
This should improve their shares, even though they are doing okay, once this contract is finalized I think it will benefit the company in more than one way. Exxon and Mobil completed their merger in 1999 to form what is now the world’s largest publicly traded energy company. Exxon and Mobil are involved in the exploration, production, manufacture, transportation and sale of crude oil, natural gas and petroleum products. The group also manufactures and markets petrochemicals, packaging films, and specialty chemicals in more than 50 countries. The company is best known by the consumers as Esso and Mobil brand. Royal Dutch and Shell Transport completed their formal unification under a single new parent company RDS in July 2005. Shell is best known for the exploration and production of oil and natural gas alongside its retail petrol stations across the UK.
Shell’s other operations include petrochemicals that are used for plastic and detergents. The share prices to date for these companies are Chevron Investment (CDI) $79. Royal Dutch Shell (RDS)? 6. 50 3i Group Competitors This company has 2 top competitors Candover Investment and CVC Capital Partners Candover Investment Their objectives is to achieve above-average growth in its net assets through capital gains from its investments and to earn satisfactory income for their shareholders CVC Limited This company provides investment is over 70 companies across all industries. This company was incorporated in 1984 and operates in Australia. The share prices to date for these companies.
Candover Investment(CDI)? 4. 99 CVC Limited? 4. 18 (AUD A$7. 60) Prudential Competitors Prudential have three top competitors they are American International Group, AXA, and Met life incorporated Their share to date are 26/11/2009 American International Group (AIG)? 21. 00 Converted this from $34. 68 AXA? 23. 95 Metlife inc. 20. 96 By looking at this spreadsheet compared to the last submission I decided not to purchase any more shares. I have been continuing to keep an eye on my share prices, not every day like when I started this assignment. Nevertheless, when I do check them they have been progressively increasing. This boost my confidence that I have made the right choice when selecting the companies to invest in. I will not be selling these shares now. I have bought them and will keep them long term so that I make a profit.
These three companies are long investments. Time to time I have had a look at Sainsbury’s shares to convince myself that I made the right decision in selling them. By doing this, this has confirmed my decision as the shares keep falling. The last time I checked them they were standing. Reflective Log What have you learned about the financial markets and, particularly, the stock markets? What is the importance of these markets? After reading and research that I have done my understanding of financial markets is as follows; A financial market is a mechanism that allows people to buy and sell (trade) financial securities (such as stocks and bonds), commodities (such as precious metals or agricultural goods), and other fungible items of value at low transaction costs and at prices that reflect the efficient-market hypothesis. Financial markets have evolved significantly over several hundred years and are undergoing constant innovation for the improvement of liquidity.
Both general markets (where many commodities are traded) and specialized markets (where only one commodity is traded) exist. Markets work by placing many interested buyers and sellers in one “place”, thus making it easier for them to find each other. An economy that relies primarily on interactions between buyers and sellers to allocate resources is known as a market economy in contrast either to a command economy or to a non-market economy such as a gift economy. Financial markets facilitate: The raising of capital (in the capital markets), the transfer of risk (in the derivatives markets), and International trade (in the currency markets); theses are used to match those who want capital to those who have it. Typically a borrower issues a receipt to the lender promising to pay back the capital. These receipts are securities which may be freely bought or sold. In return for lending money to the borrower, the lender will expect some compensation in the form of interest or dividends.
A stock market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The stock market in the United States is NYSE while in Canada; it is the Toronto Stock Exchange. Major European examples of stock exchanges include the London Stock Exchange, Paris Bourse, and the Deutsche Bourse. The stock market I had to use for this assignment was the FTSE 100. What is the overall performance of your stock investment? Please critically review the variation of your portfolio’s constituent and value. Any particular events significantly affected your investment profits? I invested in 3i Group, Bp, Prudential, and Sainsbury’s.
Once I submitted the third submission I decided to sell these’s shares as they kept falling; I did not want to lose any money at the time I thought I was making the right choice due to what was being reported in the news. Over the three months, the share price fell/rose by x%. This compares with an overall rise of y% for the FTSE100. Did I make 2500 losses for the shares I invested, because BP petrol is expensive; because the price of petrol is more than  1 per liter consumers has not got the money anyway because they have been made redundant. Consumers need petrol or diesel; if they can purchase this at a cheaper price but still get the quality then that is what they will do. The competitor is shell as their petrol is cheaper and of better quality. Prudential share price falls by 20%.
The highest risers during the period were shares in hindsight such as; insurance, clothes, and food industries. I can see that the company I chose might not have been going to perform as wells shares in other sectors; this is because unfortunately the companies I chose to invest one was getting taken over towards the end of the three months (Prudential) before this happened consumers sold their shares resulting in it falling by 20%. I Group is a small company that invests in new businesses that are starting out; obviously the businesses that 3i group has chosen haven’t taken off as much as 3i Group would have wanted them too. The recession is still recovering, therefore it will still affect some stocks in the stock market If I could start over again, I would have invested in the supermarkets that are more known than Sainsbury’s; such as Asda and Tesco. Then I would have bought shares in Cadbury’s and Next. I would have definitely have picked Cadburys as they are now owned by Kraft at one stage the share price increased up to 746p.
I would have made a profit on the money I had invested. Suppose that you can do your stock investment again, what would you do differently this time? What kind of economic factors and investment techniques would you consider? And why? If I could do my stock investment again I would have looked at the different investment techniques to support my chose such as this website. It gives an explanation in detail what techniques I could have used and what information it would give me so that I could make an informative decision. I am 100% sure that if I did this I would have made a profit not a loss on the company I chose.
At the time I thought I made the right choice but now I think it was a gamble; I could have had a bigger loss than 2500. I know now there is more to it that picking some companies and buying shares. There was a variety of websites that I could have a visit that would have made my stock investment profitable and different financial ratios I could have used; the tools of Fundamental Analysis Stock Market. Digital Look my first thought was the first company I am going to buy shares in will be Sainsbury’s because they are at the highest in the FTSE 100 table. But then I thought I need to be smart, a lot of money could go down the drain so, I am going to do some more research look at what is happening in the 3 months or more, not just with Sainsbury’s but with other companies as well.
I still have not decided what companies I am going to choose, or how many shares I am going to buy. Today I have decided I am going to do some research and have a close look to see if there is any important information in the news and see if there are any articles that are relevant and that could give me an idea what company not to go for as they may be in trouble. Watching BBC News Was watching the news when I got back from university. I heard something about share prices were down 10%. I was hoping it was not my four companies that I chose. Theses were Sainsbury’s, BP, Prudential, and 3i Group. Thankfully it was the BGS group.
Royal Bank of Scotland and Lloyds TSB are forced to sell off their branches.BGS group said some companies that have loads of money can borrow as much as they want, but the thing is there is no demand. This was the day I decided its times to keep an eye on my shares, to see what their doing, are they falling or increasing? Am I making a profit or a loss? Do I need to sell my shares? Buy more or hold on to them. I have invested 50,000 and I would like to make a profit on it, even if it is a small amount. Today I looked at my four companies, 3i, BP, Sainsbury’s were all down 3i group was in the top fallers so I felt a bit disappointed but, Prudential was up today which I was pleased about. I have invested the most in this company and have taken on a bigger risk, I cannot afford to lose my money. What I have decided to do is set up a spreadsheet on excel and keep a daily track of what’s going on with my shares up until the next submission date.
With the other companies, I was going to check my share price and make a decision. Today I will do some research and see what I can find about the companies I have chosen. I may buy the financial times and try to get an in-depth understanding of what is happening in the market. I didn’t buy the Financial Times but I looked on the digital look website and they said: The supermarket chain Sainsbury’s half-year results on Wednesday, having already worked out that it is unlikely to be able to maintain its impressive sale growth due to the effects of a reduction in inflation. After reading this on Monday. I am going to sell my shares especially if they have fallen again. I will keep track of this in my spreadsheet. I checked the share prices today and I am pleased that all my share prices have gone up, even though I am still making a loss of  1180.
This has improved from Saturday. I have lost a bit on Sainsbury’s but not enough to sell my shares. Today I have decided not to sell my shares, I am still going to take the risk and hopefully make myself some money. I will check the paper and see if there is any information about my companies. I may be able to get an incline on what’s going to happen. I will give my Sainsbury’s shares a couple of days and check on Friday just to give this company a chance to improve. I believed Sainsbury’s will continue to decline, so just to recap on Friday 13th November 2009 if Sainsbury’s shares have gone down I will sell them.
I didn’t get a chance to check my shares today, as I said yesterday I am giving Sainsbury’s a chance, and as for the other companies, I may as well check them altogether. I read in the Metro paper this morning I the business and finance section Sainsbury’s has reported on an 18. 5% rise in the past six months but warned sales could slump in the next half. The grocery chain posted healthy profits of 307m after like for like sales rose 7% in the 28 weeks to October. The share price rose 2 percent after the profit figure increased, Sainsbury’s emerged as a winner in the recession as it tempted customers away from Tescos and Asda. This was lead by advertisers’ feed for a fiver. According to Nielsen Sainsbury’s sale increase was the lowest out of the big four chains.
Sainsbury’s faces a tougher challenge to maintain the sharp rises in sales over the past year as food prices ease back. Sainsbury’s are hoping to compete in other areas. Friday I was willing to take a risk as risk is associated with money. In the news, Sainsbury’s said they will not be able to generate sales growth like last year because of a fall in inflation The share price today is 339. 30 It has fallen by 1. 0p which is a 0. 03% decrease, so I have decided to sell my shares.
The information that I found out yesterday confirmed for me its time to sell my shares otherwise it will continue to fall I will continue to make a loss and eventually lose my money, that is a risk I am not willing to take. So I sold my shares today at a price of 339. So I haven’t lost any money on these shares because the share price was the same 339. 30p. Monday I now have 3 companies the shares have gone down but still continue to grow.
Stock Market News and Share prices and they said: Insurance giant Prudential was one of the major risers after a price target upgraded from the Dutch broking group ING. They have upped its target price from 392p to 584p but maintaining its `hold’ rating for the shares. For me, this proves my investment is a risk but its a great company choice. The saving grace of Prudential is its exposure to emerging markets through ING. This is reflective of the current share price. Checked my shares today and updated my spreadsheet.
Had a look at Sainsbury’s even though I sold my shares I still like to have a look to see what was happening, and also it makes me feel so much better if they continue to fall, which means I have made the right decision. I will be keeping Prudential I feel this company is the one that will make me a profit. BP and the 3i Group are growing steadily. 20/11/2009 Checked my shares again 2 of the companies have fallen, Prudential has risen that I am pleased about hoping I will make a profit.
Reference

http://www.oneymarketing.co.uk/pensions/prudential-share-price-slumps-20/1007734. article.
http://www.thisismoney.

Stock Market Assignment

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