Question

1. How stock prices are determined? 2. What stock markets do?

1. How stock prices are determined?

2. What stock markets do?

Homework Answers

Answer #1

1. Stocks are traded on exchanges in which the stocks are listed. The price of a stick is determined by the demand and supply of the stocks. The demand is generated by the investors who want to buy the stocks of the company and supply is generated from the investors who want to sell the stocks of the company. Buyers can put their 'buy' requests on the exchanges and the sellers can request the 'sell' requests on the exchanges through brokers. The stock price is determined in real time on the basis of the total demand and total supply of a stock on a given point of time.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
How do performances of the foreign exchange markets compare with domestic stock markets?
How do performances of the foreign exchange markets compare with domestic stock markets?
According to the efficient markets hypothesis are stock prices predictable? Why? And what is a random...
According to the efficient markets hypothesis are stock prices predictable? Why? And what is a random walk?
How is the socially optimal or efficient level of output determined? Also, why do markets overprice...
How is the socially optimal or efficient level of output determined? Also, why do markets overprice or underprice when externalities are present?
Stock prices are determined by a 2 factor APT model. You have 3 investments available to...
Stock prices are determined by a 2 factor APT model. You have 3 investments available to you: Portfolio Expected Excess Return Beta 1 Beta 2 A 4.9% 1 0 B 4.0% 0 1 C 4.9% 0.5 0.5 What would the expected excess return be on an arbitrage portfolio, given this information?
Advantages of futures markets compared to forward markets. 1. How do financial futures markets overcome the...
Advantages of futures markets compared to forward markets. 1. How do financial futures markets overcome the liquidity problems associated with forward markets? 2. How do financial futures markets overcome the default risk problems associated with forward markets?
Under the efficient markets hypothesis, stock prices take a random walk around their current prices. True/False?
Under the efficient markets hypothesis, stock prices take a random walk around their current prices. True/False?
1. If stock prices should be based on future cash flows (i.e., dividends) why do investors...
1. If stock prices should be based on future cash flows (i.e., dividends) why do investors purchase stocks of companies that do not pay dividends? 2. There are some that say that U.S. firms concentrate too much on short-term profits and not enough on long-term profits. Do you agree? How does this conflict with the valuation of stock based on future cash flows. 3. Describe the Efficient Market Hypothesis. 4. Describe Weak efficiency Semi-strong efficiency Strong efficiency Which, if any,...
1) What is a tariff and how does it affect prices of goods? 2) Do you...
1) What is a tariff and how does it affect prices of goods? 2) Do you think it is important for two countries to engage in trade deals, or to avoid trade deals, and negotiate in this manner? Why or why not? 3) How do tariffs lead to trade wars, and what does that do to the global economy in the long-run?
1) What is a tariff and how does it affect prices of goods? 2) Do you...
1) What is a tariff and how does it affect prices of goods? 2) Do you think it is important for two countries to engage in trade deals, or to avoid trade deals, and negotiate in this manner? Why or why not? 3) How do tariffs lead to trade wars, and what does that do to the global economy in the long-run?
1. How can financial institutions with stock portfolios use stock options when they expect stock prices...
1. How can financial institutions with stock portfolios use stock options when they expect stock prices to rise substantially but do not yet have sufficient funds to purchase more stock? 2. Explain how and why the option premiums may change in response to a surprise announcement that the Fed will increase interest rates even if stock prices are not affected?