Trading ebook Finance - Neural Prediction of Weekly Stock Market Index

The hypothesis is that the current stock prices

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Unformatted text preview: nd vice versa [9]. The hypothesis is that the current stock prices indicate the cumulative sum of the present and future worth of any company. If the interest rates increase, the equivalent future value of a stock in terms of today’s dollars reduces, causing the stock price to reduce. Financial experts report that the long term value of a broad based index is affected by interest rates after some unknown delay. However, the exact effect is unknown and hence, a neural network can be suitably applied to find this non-linear mapping. The next section is a brief review of some of the similar work done while section three describes the selection of features from the raw data for training of the neural network. Test results for different strategies are given in section four and the last section lists the conclusions from this project. 2. Literature review The work done in the area of stock market prediction using neural networks can be classified into two broad categories: • Prediction using past stock index values and momentum indicators based on these values, and • Prediction using past stock index values and other fundamental factors such as interest rates, foreign exchange rates, up and do...
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This note was uploaded on 07/20/2012 for the course ECON 203 taught by Professor Girishdev during the Spring '12 term at Indian Institute of Technology, Kharagpur.

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