what do you think would happen to the expected return?

What do you think would happen to the expected return on stocks if investors perceived higher volatility in the equity market?

Shouldn't the Federal Reserve raise interest rates?

The costs of living are rising? So shouldn’t the fed raise rates to slow things down? I think subprime threw them a curve ball! But I think they should crack down on fraud and mismanagement, jail a few major investors and change investment rules so that the volatility in the markets will erase itself. After all, the markets are mostly bets placed on a rise and fall of a stock price or percieved values per moment, when in acuality, some companies need this cash, but many do not! They do not need investor’s money to keep going, so they are using that leverage to make money in the markets off of options and dissuading smaller investors from playing against the house. Is this fair? Should our stock market be played like this? And should they be allowed to play our tax dollars like this too?

I think raise interest rates and watch these guys sweat a little like they have made small investors sweat!
While I agree that wealth pays taxes, I am also aware that somebody raised those children to get that wealth! The people that put the diapers on those kids and paid for their education and what not do not deserve to be downtrodden. I am an American Taxpayer and I don’t like paying double taxes, once to put diapers on the wealthy kids and then again to pay for extravagant homes they did not have to buy in the first place.

I cannot imagine owning a 700k house when I am in my early 20′s! That is just so totally bogus! I am opposed to supporting that! I busted my hump most of my life to even have my modest lifestyle now!

I want the fed to do it’s job and raise interest rates!

Finance Research – ARCH and GARCH coefficients in Stock Returns?

++ My question is technical and academic in nature. I am currently involved in a research so I need an expert answer in simple terms ++

How can I interpret the ARCH and GARCH coefficients in analyzing financial time series (stock returns)? I know, the among so many other implications, the sum of the coefficients indicates volatility clustering and persistence. But my question is how can I infer conclusions, in simple words, from the results that can be useful for the ordinary investors, the policymakers and the capital market. What can say about the riskiness of stock market when ARCH and GARCH coefficients are statistically significant. My professor asks me to come up with clear implications that is understandable by everybody. I am not a very technical person. I need a comprehensive and non-technical answer please.

Who is leading the stock market?

What I mean is, who is controlling the volatility and the massive price swings (driving the market lower)?
I was always under the assumption that the market was mostly controlled by many millions of people investing relatively small amounts, IRAs, 401Ks, personal accounts through banks or brokers. Under this assumption some natural movement is understood but the prevailing movement will be flat to slightly up.
Now I am concerned that my understanding is seriously flawed. This massive movement down and all the volatility tells me I am betting on a market that is stacked with shorts and few people with tons of money.
How can small investors that can’t watch the market or move money by the second compete? It’s like betting on a football game and having some people allowed to change their bet at halftime (or in the 4th with 1 sec to go).
Is the deck stacked?
Is the market run by very few people with stupid amounts of money?
Should small investors invest in the market?
Are you sick of watching your 401K tank?
Thanks for reading!
Comments are appreciated.

What is the maximum you would be willing to pay for this put option?

You own a stock currently trading at . The annual volatility of the stock based on historical prices is 20%. Yesterday, the Fed issued a warning to small investors suggesting that the stock market’s volatility has doubled due to oil price uncertainty. The uncertainty is expected to last 6 months, after which normal times will resume. Concerned about the wealth of your investment, you decide to invest in a 6 month European put option with an exercise price of . Assume that the annual risk free rate is 5%.

How does the housing market affect the stock market so much?

I heard that the housing market being low in sales and with the forclousure market crashing, it is affecting investors so much that they are moving money out of equities (stocks) and investing more in safer investments. Thats why the stock market has been down so much in the past week.

How does this happen? I was reading about it, but I didn’t really understand. Are investors pulling out their stocks from big lenders? How exactly does it affect the stock market? I need help understanding it in normal terms that make sense.

Please advise, thank you!!

Stock market volatility due to small investors?

Is the volatility in the stock market due to small investors who buy and sell frequently?