Finance 1750 3day Essay Example | Topics and Well Written Essays - 1750 words

pay 1750 3day - Essay ExampleClose follow up shows that Chinas economy has slightly outdone lacquers, in harm of the GDP. This achievement suggests that in a few years to come China lead only be a step behind the United States in terms of the largest economy. According to Lai and Yangs (2009) report, after the devil main stock exchanges Shenzhen tenor Exchange and Shanghai Stock Exchange that were launched in 1990, the state owned enterprises have been developed and supported by this two markets financially to a bully extent. Taking a closer look at Chinas stock markets and rattling farming it is not clear whether this two components are correlated or not. In this paper, we use volatility models to match results between the two markets and finally install whether the two are correlated as we further establish their potential variation effects. In this case we monthly data sets ranging from the year 2005 to 2010. From the data, several statistical mental test is applied to measure the rate of return on the correlation between the two markets, stock markets, and real estate. Stock Investment In general, investors purchase common stock from the stock market in terms of stock investments, which generate dividends that earn those profits or capital gain because of positive shift in the stocks, takeing price. ... The second advantage is that it is possible to minimize the risk on a portfolio greatly by having diversification where several types of stocks are held (Bodie, et al., 2009). The third important advantage is that it is now very possible to sell common stock on secondary markets with minimum transaction costs. This is possible due to the high liquidness of stocks. The other important advantage is that, when compared to other investments, the pricing of common stock is not only touched by shifts in interest rates but is also affected by performance of the wet and earning prospects. Stock Market Stock markets are also referred to as equity marke ts. They unremarkably provide a platform where shares can be issued, and many investors can come and trade their shares and securities. The markets are split up into two depending on how they carry out transactions. The first is exchange market, and it is usually physical where investors can come and freely trade with their securities. The second one is referred to as over the counter market. In this case, transactions are normally carried out over the phone or through the internet on the computer. The markets are also divided into two main parts, and these are primary and secondary. The primary market issues new securities such as initial public offering (IPO) while secondary markets offer securities that were previously offered and are being presented subsequently for trade. Returns and Risks of Stock Investment The first thing we need to understand is as an investor, there are two ship canal in which one can gain from their investment, and this is through dividends and capital gains. A capital gain is achieved because of an add in the value of a capital asset such as stocks