Though the overall volume is low, individual transactions tend to be large. That means price movements are greater. In addition, the spreads between the bid and ask prices for an asset tend to be Essentially, short-run swings in stock prices are simply out of proportion to the movements in the underlying cash flows, ruling out the other two explanations. The beta indicates how volatile a stock's price is in comparison to stocks in general. A beta greater than 1 indicates a stock's price swings more wildly than most stocks. A beta of 1 or lower indicates that a stock's price is steadier than most stocks. This would not be accurate because the stock split merely changed the price, not the value of the company. To compensate for the effects of the split, we have to adjust the divisor downward to 9.5.

When looking at short-term changes in a stock’s price, you need to recognize if the price is the result of a catalyst or just day to day fluctuations of trading. If the catalyst represents a serious threat to a company’s bottom line, it may be prudent to sell (or at least reduce the position) the stock, even at a loss.

Movements in stock prices are often illustrated using relative (percentage) price changes instead of absolute price changes. The S&P 500 stock index is value-weighted. Indices of Nasdaq stocks tend to be less volatile than the S&P 500 index. The Russell 3000 is a broad-based measure of bond prices. Movements in individual stock prices tend to be a. positively correlated b. positively correlated with inflation c. negatively correlated d. positively correlated with changes in interest rates

Movements in stock prices are often illustrated using relative (percentage) price changes instead of absolute price changes. The S&P 500 stock index is value-weighted. Indices of Nasdaq stocks tend to be less volatile than the S&P 500 index. The Russell 3000 is a broad-based measure of bond prices.

in Stock-. Market Prices. By EUGENE F. FAMA. GRADUATE SCHOOL OF BUSINESS behavior in individual securities will tend ward movements in prices. Data is currently not available.