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Unformatted text preview: nd vice versa . 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.
- Spring '12