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Risk Analysis of Stock Market

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Risk Analysis of Stock Market

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Our assignment topic is “Risk analysis of Stock Market”. To identify the stock market risk we have to do some calculation. In this assignment we choose Coefficient of varience(CV) method We select five banks (Dhaka Bank Ltd., Prime Bank Ltd., Social Islami Bank Ltd., Sahjalal Bank Ltd. and Premium Bank Ltd. ) of financial institution. 1.1 History of the Stock Market of Bangladesh

Dhaka Stock Exchange (Generally known as DSE) is the main stock exchange of Bangladesh. It is located in Motijheel at the heart of the Dhaka city. It was incorporated in 1954. Dhaka stock exchange is the first stock exchange of the country. As of 18 August 2010, the Dhaka Stock Exchange had over 750 listed companies with a combined market capitalization of $50.28 billion. OBJECTIVE OF THE STUDY

2.1 Definition of the Stock Market Risk
Stock market risk is the tendency of stock prices to decrease due to the change in value of the market risk factors. Generally, value of units or shares of a mutual fund that invests in securities is directly related to the market value of those investments held by the mutual fund. The market value of those investments will go up and down depending on the financial performance of the issuers and general economic, political, tax and market conditions. Standard market risk factors are stock prices, interest rates, foreign exchange rates, and commodity prices.

2.2 Definition of Standard Deviation
In statistics and probability theory, standard deviation shows how much variation or "dispersion" exists from the average (mean, or expected value). A low standard deviation indicates that the data points tend to be very close to the mean, whereas high standard deviation indicates that the data points are spread out over a large range of values 2.3 Definition of Coefficient of Varience

The coefficient of variation represents the ratio of the standard deviation to the mean, and it is  a useful statistic for comparing the degree of...