Homework Help - Stock Markets in emerging economies

Discussion in 'Off-Topic Discussions' started by Abner, Mar 12, 2006.

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  1. Abner

    Abner Well-Known Member

    Question for anybody out there, hopefully a Business or Economics major.

    "On average, stock markets in emerging economies have grown by more than twice the stock markets in developed economies during the past decade."

    a. True
    b. False



    I would appreciate any feedback.

    Thanks,

    Abner :)
     
  2. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member

    I'm just guessing here. But think of it like this. The above question is kind of like the macro-level version of the following more micro-level question. If you were entrusted with x amount of someone else's money and were instructed to invest same in a computer company with the following conditions, to-wit, (a) you must invest the entire amount in one company and (b) go for growth, would your client have more growth potential by investing it all in IBM or would your client have more growth potential if you invested in a start-up?
     
    Last edited by a moderator: Mar 12, 2006
  3. Abner

    Abner Well-Known Member

    Re: Re: Homework Help - Stock Markets in emerging economies


    Good points Ted. Your example leads me to believe the answer is "True".


    Take care buddy!


    Thanks, Abner :)
     
  4. airtorn

    airtorn Moderator

    False - For the 10 year period ending on 12/31/05, the S&P 500 had an average annual return of ~ 9% while the MSCI Emerging Markets index returned ~ 7%. For the first five years of this period, the S&P 500 did better. For the second five year period, the Emerging Markets index outperformed the S&P 500.
     
    Last edited by a moderator: Mar 12, 2006
  5. Abner

    Abner Well-Known Member


    Thanks for your time and comments, to both you and Ted.


    Respectfully,


    Abner :)
     
  6. Tim D

    Tim D Member

    Asia, one of the leading "emerging markets"had hit quite some difficult times as a region(Japan although a developed market has had relatively no interest and actually increased it's interest rate fro the first time since it's banking crisis this week). Emerging markets have greater returns if they pan out the issue is of course if it pans out(there are poltical and economic considerations aswell) , that also makes them much more risky then developed markets.

    -not sure if any of that helps, I hope it does..good luck
     
  7. Abner

    Abner Well-Known Member

    Yes, your comments help me see the "whole" picture. Anybody else, feel free to jump in. Keep em coming!!


    Thanks,


    Abner :)
     
  8. raristud

    raristud Member

    Abner. Check out www.elitetrader.com or
    www.moneytec.com The websites are discussion boards
    popular with active traders in currencies, stocks, options ... ect.

    Also, E-mail your questions to this organization.
    www.sovereignsociety.com . They focus on emerging markets
    and offshore investing. Good website with lots of info.
     
    Last edited by a moderator: Mar 13, 2006
  9. raristud

    raristud Member

  10. Abner

    Abner Well-Known Member


    Awesome!!


    Thanks Raristud!


    Abner :)
     

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