Chapter_08 - A Statistical Perspective Market...

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A Statistical Perspective Market Capitalization of Developed Countries Market Capitalization of Developing Countries Measures of Liquidity Measures of Market Concentration
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Market Capitalization of Developed Countries Almost 92% of the total market capitalization of the world’s equity markets is accounted for by the market capitalization of the developed world.
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The other 10% is accounted for by the market capitalization of developing countries in “emerging markets”. Latin America Asia Eastern Europe Mideast/Africa Recently the growth rates in these emerging markets have been strong, but with more volatility than we have here at home. Market Capitalization of Developing Countries
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Measures of Liquidity The equity markets of the developed world tend to be much more liquid than emerging markets. Liquidity refers to how quickly an asset can be sold without a major price concession. So, while investments in emerging markets may be profitable, the focus should be on the long term.
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Measures of Market Concentration Emerging Markets tend to be much more concentrated than our markets. Concentrated in relatively few companies. That is, a few issues account for a much larger percentage of the overall market capitalization in emerging markets than in the equity markets of the developed world.
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Market Structure, Trading Practices, and Costs Primary Markets Shares offered for sale directly from the issuing company.
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This note was uploaded on 07/16/2011 for the course FINA 5331 taught by Professor Staff during the Spring '08 term at UT Arlington.

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Chapter_08 - A Statistical Perspective Market...

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