Are Small Cap Stocks Influenced Similarly and by the Same Economic Essay

are Small Cap Stocks Influenced Similarly and by the Same Economic Indicators as Large Cap Stocks An Annotated Bibliography - exam ExampleThe study used monthly data from 1974 to 1989 for macro frugal indicators and for the Fed pecuniary policy (as unconditional variables) and used 39 portfolios of 10 value weighted origins from greathearted cap and small cap categories (as reliant variables) to study the capriciousness in stock return. They found that 32% of the stock market return volatility could be apologizeed by the monetary policy which is similar to the finding of Chang, Yeung, & Yip. (2000) below that macroeconomic indicators do not richly explain the stock market movements. It was also found that 96% of the cases showed that a tightening of the monetary policy (reduced money supply) reduced stock returns. Further, the study found that while twain small and large firms were harmed by the disinflationary monetary policy, only large firms benefited from expansionary monetary policy. The study illuminates the bibliographic topic by devising a distinction between small and large cap stocks and the difference in effect of macroeconomic indicators on different stock categories. The authors at the time of the study were Doctoral Students at the University of Pennsylvania. They studied the concern of a set of 21 economic indicators and followed a regression analysis approach to identify whether economic indicators could explain the stock market movements from 1997 to 1999.... They first started with sorting for correlation between the economic indicators and excluded some of them establish on the statistical correlation. For the remaining indicators, they developed a multiple linear regression model to explain the stock price. They found that even after multiple regressions and excluding the insignificant variables, the resulting regression model could not fully explain the stock market movements. This finding is in line with that of Thorbecke and Coppock (1995) above. This study is of importance for the current enquiry as I intend to use a similar methodology for multiple regression on 9 economic indicators in the US that this study found to be statistically significant in their regression model. Vygodina, A. V. (2006). Effects of size and international exposure of the US firms on the relationship between stock prices and exchange rates. Global Finance Journal 17 , 214-23. The author at the time of the study was a Professor at the Department of Finance, CBA, California State University at Sacramento. The research was aimed at studying whether the changes in exchange rates have a difference in impact on the stock prices establish on the size of a firm. The methodology used was to conduct a Granger precedent test to verify the causality from large cap and small cap stocks to the exchange rate. The Granger Causality test was used in the study as it statistically tests whether one time series causes movements in some other ti me series. It was found that while there did exist a statistically significant Granger Causality from large-caps to the exchange rate, there was no causality from small caps. The study also noted that the as both variables are significantly affected by the federal monetary policy and that the nature of relationship