What factors affect stock prices? Choose one factor and explain it in your initial post with...

What factors affect stock prices? Choose one factor and explain it in your initial post with an example. How deterministic is the factor, and what are the variables that you need to take into account when trying to predict that factor?

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Expert Solution

There are different factors which determine the price of a stock and which inflation, interest rates, economic factors, quarterly earnings statement etc.

Most important factor out of these for me is Quarterly earnings of the company which gives a significant Idea about the profit and losses of the company in the current year and a projection for incoming years.

Example- Tata motors acquired Jaguar & land rover & it has fallen around 90 percent from it's high on dismal performance by it's subsidiaries over quarters.

It is very determinant as it can easily decide the short term trends of the company irrespective of macro trend. It is highly firm specific & it gives a significant direction to stock price.

One can take Firm specific risk assessment measure and past performance trends along with projection made in past for future years by a company. One can also go through detailed analysis of Quarterly statements & Annual reports.

jeff jeffy answered 1 year ago

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