Stock Market Notes

Stock Market Notes - Lecture 4 Notes(Stock Market emergency...

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Lecture 4 Notes (Stock Market, emergency crisis) What is a stock index? o What does it mean “the Dow Hones Industrial Average was down more than 700 points”? Or the “TSE fell more than 400 points”. The TSE index monitors the price chances of a particular group of 300 stocks o Some stock will rise and others will fall o If a stock rises a point it means that the stock price rose a dollar o At the close of the market all the increases of the 300 stocks are added up and all of the decreases are added up o If increases are greater than the decreases then there will be a rise in the index o Example: Suppose there is an index that has 3 stocks Stock A increases by $1.50 Stock B increases by $0.50 Stock C decreases by $3.00 The index would change by +1.5, +0.5, -3 = -1 Therefore the index would fall by 1 point Interesting Points o Dow Jones Industrial Average monitors the prices changes of only 30 stocks o IPO is initial public offering o Companies issue stocks to raise capital o
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