Research Paper Help-Determination of Stock Prices
Stock prices are very difficult to predict; although, there are some theories for the determination of stock prices such as the fundamental analysis, the Gordon growth model (or dividend-discount model), and the efficient market analysis. Read Hubbard and O’Brien’s (2017) Chapter 6 and Garth Friesen’s (2017) article, When Good News Is Bad for Stocks (Links to an external site.)Links to an external site.,
Analyze reasons why good news for the economy (long term) isn’t always good news for stock and other financial markets (short term).
Evaluate the assumption that stock price movements are purely random (the random walk theory), describing what a random walk is.
Discuss the strengths and weaknesses of the efficient markets hypothesis.
Explain the rationale for buying stocks when stock prices are not predictable, noting what kind of strategies would be useful for investing $100,000.
