The Measurement of Stock Development

There are three variables that help measure the stock development in a country; Stock market capitalization to nominal GDP, Stock traded to nominal GDP, Turnover ratio.

First, with respect to measuring the stock market development, Stock trading (stock traded to nominal GDP) can be used. A rapid increase in the trading volume/value of security on an exchange is indicative of interest in the security or the market. The trading volume and value is an important indicator of the level of liquidity, the efficiency of the infrastructural facilities of a stock market and the investment culture of the populace. Liquidity is the ease with which a security is converted into cash. The activities of portfolio managers, pension funds manager, and unit trust managers are capable of stimulating trading and improving liquidity. The level of awareness of investors and the number of listings could have favorable impact on the trading volume. The market......

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Title: The Measurement Of Stock Development
Approximate Word Count: 1158
Approximate Pages: 5 (250 words per double-spaced page)

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