Intro to Dax, the German Stock Index

In: Other Topics

Submitted By ZimmZimma
Words 263
Pages 2
The DAX is a is a blue chip stock market index made up of 30 major German companies trading on the Frankfurt Stock Exchange, founded in July 1988. DAX stands for Deutscher Aktienindex, translated literally to German Stock Index. The DAX is equivalent to the Dow Jones Industrial Average here in the US. The 30 stocks that make up the DAX are simply the 30 largest companies on the Frankfort Stock Exchange, based on order book volume and market capitalization. DAX is a Capitalization-weighted index.

The DAX is a large cap type of stock index that has to indexing versions. The two versions report different values. The first version is the performance index. This version is more commonly quoted and includes dividends in the quote. The second version is the price index. This version is most similar to other indices in other countries and markets. The price index is calcultated like any weighted average, Current index = Current total market cap of constituents × Previous Value / Previous Period.

The DAX started out at 1,000 from its base date in December of 1987, before it was first calculated and published in July of 1988. The highest closing price for the DAX occurred this year in April on the 10th, when it closed at 12,374.73. Today the closing price was 10,131.74. Some of the more familiar companies on the DAX are Adidas, BMW, Bayer, BASF, SAP, Siemens, and Volkswagon. The trend of the DAX is fairly similar to that of the Dow Jones Industrial Average over the last ten…...

Similar Documents

Stock Index Methodology

...the globe for calculating Stock Index) By: Echo Group Russian Trading System (RTS) Stock Exchange 1. Eligibility Factors 2.1. Market Capitalization 2.2.1. A stock’s weight in an index is determined by the float-adjusted market capitalization of the stock 2.2.2. Each company’s market capitalization is capped at 15% in the RTSI and RTS2, and at 25% in the RTS Sector Indices, to restrict the weight of any one company dominating the entire index. 2.2. Liquidity: Securities that do not meet the following criteria over the three month period preceding the date of the revision are excluded from the index eligibility list 2.3.3. The average number of companies-brokers that submitted the “bid” and “ask” quotes for the security at the end of the trading session is at least two. 2.3.4. 2. The average spread between the “ask” and the “bid” prices at the end of the trading session is less than or equal to 15%, as compared to the buying price. 2.3.5. 3. The security should have two-sided quotes in the trading system at the end of the trading session for at least 90% of the trading days of a given period. 2.3.6. 4. The daily average number of transactions in this security is greater than or equal to 0.5. 2.3.7. 5. The daily average trading volume in this security is greater than or equal to US$ 3,000 2.3. Domicile. 2.4.8. Only stocks of a Russian domicile are...

Words: 4263 - Pages: 18

German

...Deutschland = germany Neuseeland = new zealand Lesson 1 Zur zeit = now Leben = live Etwa = approximate Eltern = parents Denn = because Arbeiten = work Fragen = ask Im kurs = in class übrigens = by the way Machen = to do (was machen Sie? > Ich bin Ingenieur) Lesen = reading Jahre alt = year old Hausfrau = housewife Noch= still Zusammen = together Landwirte = farmer Also= auch Möchten = would like to Später = later Aller welt = all Hören = listen Nicht = not Warden = will / to become Leicht = easy berufstätig = working spielt = play klavier spielen = piano playing Oft= often Ledig = single Kauft= buy Verkauft= sell Spricht = speak Tennis spielen Machen = to do Übrigens: btw Sprechen = speak Deustch = german Schon gut = very good Feuer = fire Leider = unfortunately Liegt = lie (on) Lesson 2 Der Elektroherd = electric cooker Der Tisch = table Der Kugelschreiber = ball pen Der Taschenrechner = calculator Der Stecker = plug Der Topf = pot Der Stuhl = chair (Stuhle pl) Der Wasserhahn = tap Der Regal Das Foto = photo Das Waschbecken = sink (spüle) Das kochfeld = hob (灶台) Die Steckdose = socket Die Taschenlampe = torch Die Lampe = lamp Die Mine = lead Die Glühbirne = bulb Die Zahlen = number Die Batterien = battery Die Kamera = camera Schrank(sl), Schranke (pl) Regal (sl), Regale (pl) shelf Spüle (sl), Spülen (pl) sink Das ist ein Küchenschrank. Der Schrank......

Words: 725 - Pages: 3

Index Fund

...INDEX FUNDS.. FM n FS PROJECT Active and Passive Management Before we get into the details of index funds, it's important to understand the two different styles of mutual-fund management: passive and active. Most mutual funds fit under the active management category. Active management involves the art of stock picking and market timing. This means the fund manager will put his/her skills to the test trying to pick securities that will perform better than the market. Because actively managed funds require more hands-on research and because they experience a higher volume of trading, their expenses are higher. Passively managed funds, on the other hand, do not attempt to beat the market. A passive strategy instead seeks to match the risk and return of the stock market or a segment of it. You can think of passive management as the buy-and-hold approach to money management. Defn- An index fund a collective investment scheme that aims to replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held constant, regardless of market condition. An index fund is a mutual fund which merely invests in the securities in the index. It is passive, in the sense that absolutely no effort is made to produce results better than the index. HISTORY: Index funds haven't been around forever -- how did they come about? Long ago, there was a student at the University of Chicago who studied modern ideas of finance......

Words: 3426 - Pages: 14

Dax (Frankfurt Stock Exchange)

...DAX INTRODUCTION It is an index that tracks the price development of the 30 largest and most actively traded German equitiesDAX was launched on 1 July 1988 by FWB Frankfurter Wertpapierbörse (Frankfurt Stock Exchange), Arbeitsgemeinschaft der Deutschen Wertpapierbörsen (Association of German Stock Exchanges) and Börsen-Zeitung (a German stock exchange newspaper).It comprises the 30 most actively traded stocks (blue chips), and represents approximately 75 percent of the aggregate capital stock of listed German stock corporations. Moreover, DAX shares account for approximately 85 percent of trading volume in German equities.DAX stocks are admitted to trading in the Regulated Market segment and are listed in Prime Standard. The criteria for weighting the stocks in the index are: trading volume and market capitalization on the basis of the number of shares in free float, as well as position in the respective sector.DAX is calculated by Deutsche Börse AG as both a price and performance index on the basis of Xetra prices, and updated by the second. The calculation procedure is independently monitored on a regular basis. Deutsche Börse decides whether changes are to be made to the composition of the index on an annual basis in September.Outside the regular review dates, a company can be taken out of the index if it does no longer belong to the 45 largest companies in terms of market capitalization and trading volume. Respectively, a company can be included in the index if it......

Words: 767 - Pages: 4

German Accounting

...German Accounting Introduction We are on the precipice of a fundamental globalisation step. The important and continued globalisation of investment has led to the development of internationally applicable standards and codes of practice. The international demand for standardised regulatory systems and processes has many benefits; however countries have been largely unwilling to adopt the international standards and codes for various reasons. (Mansfield, 2004) This report will focus on Germany and its current rate of adoption of the international accounting practices, whilst observing their history and cultural influences that have impacted on their current practices today. We have chosen Volkswagen to demonstrate Germany’s current standards and practice. A history of German accounting The Franciscan monk Luca Pacioli (1445 - 1514) published the first book on double entry bookkeeping (DEB) in 1494. (Derks, 2008, p. 205). German economic historian Werner Sombart (1863 - 1941) said that DEB was ‘one of the most beautiful discoveries of the human spirit’ (Funnell, 2001, p. 55). German accounting has been dominated by a series of competing theories of accounting. (Kupper, 2005, p. 346) The French Ordonnance de Commerce of 1673 and the 1807 Code de Commerce can be regarded as the roots of accounting principles and regulations in Germany. The first General German Commercial Code, enacted in 1861, has much in common in terms of accounting with its French counterpart. The...

Words: 706 - Pages: 3

A Study on S&P 500 Index Stock Return and Volatility Using Arima and Garch Modeling

...A Study on S&P 500 Index Stock Return and Volatility using ARIMA and GARCH Modeling Kaiyuan Song, Di Wu Summary In this project we first checked consistency and seasonality of S&P500 index stock performance by splitting its recent twenty years historical data into ten two year data and built ARIMA and GARCH models for each sub-period. We found that the models are considerably consistent before 2007-2008 sub-period, and there exists some minor seasonality in several subperiods, but no particular pattern can be identified for the whole period. We then tried to predict future return, volatility and VaR using the model we built for the last sub-period based on rolling forecast procedure. Though the fitted values of 10th sub-period model are very acceptable, the predicted values are reasonable yet far from satisfactory. Only some future volatility can be predicted using one-step ahead rolling forecast, and return prediction is not much better than just using historical mean, which is almost 0, to predict. These results suggest that external variables are needed for more accurate predictions, time series models alone are not sufficient. Data S&P500 index daily closing price from 1993 to 2012 are obtained from yahoo finance website. It is one of the best measures of current state of U.S. domestic economy, therefore by studying its fluctuations, consistency, seasonality and make predictions, one can determine if it is a good time to invest in U.S. stock......

Words: 1146 - Pages: 5

Intro to Financial

...RISK AND RETURN IN CAPITAL MARKETS SECURITY RETURNS Components of security returns • Stocks – Capital gains/losses and dividends • Bonds – Capital gains/losses and interest • Returns stated in absolute dollar or percentage terms o Absolute dollar return = (end price – beginning price + cash flow) o Percent return = (end price – beginning price + cash flow)/beginning price = absolute dollar return / beginning price • If the security is a stock, the percent return can be separated into the capital gain yield (the first term below) and the dividend yield (the second term): Rt = (end price – beginning price) / beginning price + dividend / beginning price where Rt is the return for time period t. Example You purchase a stock for $50, sell it one year later for $53. During that year, you received a dividend of $2. What are your absolute and percent returns? Separate the percent return into the two components. Capital gain = 53 – 50 = 3 Dividend = 2 Absolute dollar return = 3 + 2 = 5 Percent return = 5/50 = 3/50 + 2/50 = 6% + 4% = 10% Capital gain yield = 6% Dividend yield = 4% Example You purchase a $1000, 5%, 20 year semi-annual bond for $1050 right after a coupon payment. One year later you sell the bond for $1025. What are your absolute and percent returns? Capital loss = 1025 – 1050 = -25 Coupon payments = 5% ( 1000 = 50 Absolute dollar return = -25 + 50 = 25 Percent return = 25 / 1050 = 2.38% ...

Words: 8482 - Pages: 34

Stock

...Bumpy Ride for Stocks Post-Fed By JONATHAN CHENG Stocks bounced in and out of positive territory and the dollar and the 10-year Treasury note fell after the Federal Reserve said it would buy $600 billion in longer-term securities by the middle of next year as part of its latest effort to prime the domestic economy. The Dow Jones Industrial Average was down 11 points, or 0.1%, to 11178, while the Standard & Poor's 500-stock index fell less than one point to 1193 and the Nasdaq Composite fell less than one point to 2533. [pic]Getty Images A financial professional looks over at his screen on the floor of the New York Stock Exchange in the middle of the trading day Nov. 3. The 10-year Treasury note sank, pushing the yield up to 2.634%. Gold and metals also fell as the Fed said it would maintain its existing policy of reinvesting principal payments from its securities holdings, and purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011 at a pace of about $75 billion a month. The Fed said it would also "regularly review the pace of its securities purchases and the overall size of the asset-purchase program" as economic data flows in. Expectations of Fed easing had helped fuel a two-month surge on the stock market that has added 12% to the Dow. The Fed move was generally in line with market estimates, putting to rest the idea that the central bank would proceed on a more cautious step-by-step basis from the......

Words: 1172 - Pages: 5

Index

...Dow Jones Industrial AverageTM Stated Objective To represent large and well-known U.S. companies. Covers all industries with the exception of Transportation and Utilities. Key Features — The index is maintained by the Averages Committee. — Components are added and deleted on an as-needed basis. For the sake of continuity, such changes are rare, and typically occur following corporate acquisitions or other significant changes in a component company's core business. When one component is replaced, all of them are reviewed. — While stock selection is not governed by quantitative rules, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors. Maintaining adequate sector representation within the index is also a consideration in the selection process. — The index is price weighted. — The Dow Jones Industrial AverageTM was first calculated on May 26, 1896. Descriptive Statistics Market Capitalization (Billions) ComponentCurrency Number | Float-Full Adjusted Mean Median Largest Smallest | USD 30 | 5,016.6 4,769.7 159.0 137.8 412.4 34.2 | Data calculated as of end of October, 2014. Mean, median, largest component and smallest component values are based on float-adjusted market......

Words: 3120 - Pages: 13

Stock Exchanges in India

...STOCK EXCHANGES IN INDIA Module Objectives The main objective of this module is to explain the structure of organized exchanges for trading in stocks, commodities and derivatives. The features of derivative instruments like forwards, futures, options and swaps are also described. Module Contents 5.1. Stock Exchanges 5.2. Commodity Exchanges 5.3. Derivatives 5.4. Currency Futures in India 5.1 Stock Exchanges in India 5.1.1 History and Development Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meagre and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began......

Words: 20281 - Pages: 82

Stock Exchange in Germany and Poland

...Subject: Microeconomics "Stock exchange in Germany and Poland" Content 1 Introduction 2 Stock exchange and corporate capital needs 3 Regulation of the stock market in Germany and Poland 4 Stocks and Bonds 4.1 Stocks 4.2 Bonds 4.3 Corporate choice between stocks and bonds 5 Share Market Value 6 The History of the Stock exchange in Germany from Frankfurt 7 The History of Stock Exchange in Poland 8 The Frankfurt Stock Exchange 9 The Warsaw Stock Exchange 10 The DAX at the Frankfurt Stock Exchange 11 The WIG on the Warsaw Stock Exchange 12 Stock market indexes compared 13 Conclusion 14 References 1 Introduction “Stock exchanges deal with a number of financial instruments such as stocks, bonds and equities. Both corporate and government bonds are traded in stock exchanges. Every day, stocks are exchanged and traded in numerous international stock exchanges around the world. Stock Exchanges are open markets that trade financial assets. So, the main function is to ease the transactions for buying and selling of securities. Stock exchanges also serve as a source of capital formation for listed companies. Whether associated with a company or acting as an individual, a stock exchange is the place where stocks are bought and sold. The actual trading of stocks takes place through mediators such as financial advisors, brokerage houses, and stockbrokers. There are a number of major stock exchanges around......

Words: 3730 - Pages: 15

Stock Index

...The theoretical price of the MMI March ’86 futures contract is(Assume 23 days): PV[S(T)]=S(t)-PV(3.41)=311.74-3.41*e^(-0.068*23/365)=308.34 F(t,T)=308.34*e^(0.068*23/365)=309.67 Theoretical price= 309.67 Market future price= 313.55 Spot price today=311.74 Assume that Jim is subject to a $5,000,000 position limit: Cash Flow at t Cash Flow at T Borrow money 311.74*110%=342.91 -342.91*e^(0.068*23/365)= -344.38 Margin payment 311.74*10%=-31.17 31.17 Buy underlying -311.74 S(T)+3.41*(311.74/1374.50)=S(T)+0.77 Short future 0 313.55-S(T) Total 0 313.55-344.38+31.17+0.77=1.11 Since Jim is subject to a $5,000,000 position limit, he will back 5000000/311.74=16039Units. Thus, he can make profit from this arbitrage opportunity about 16039*1.11=$17803.29. The rate of return Jim expects to earn is: (17803.29-transcation cost)/5,500,000= (17803.29*99.75%)/5,500,000=0.32% People who want to protect their assets against the risk of interest rate fluctuation. People who want to get arbitrage opportunity. People who are speculator. When we comparing the differences between the theoretical price and the market future price, we could exploit the arbitrage opportunity depend whether the difference is positive or negative. When the theoretical price is lower than the market future price, we could buy underlying at low price and short sell the future contract. Compare to the MMI, S&P 500 will have a higher likelihood of having a counter party....

Words: 292 - Pages: 2

The Empirical Research on the Effect of Investor Sentiment for the Stock Market of China Based on Stock Index Futures

...Finance 金融, 2012, 2, 151-154 http://dx.doi.org/10.12677/fin.2012.23017 Published Online July 2012 (http://www.hanspub.org/journal/fin) The Empirical Research on the Effect of Investor Sentiment for the Stock Market of China Based on Stock Index Futures Yongquan Pan, Zi Lin Dongling School of Economics and Management, University of Science and Technology Beijing, Beijing Email: yqpan@ustb.edu.cn, linziliz@sina.com Received: Feb. 6th, 2012; revised: Feb. 26th, 2012; accepted: Mar. 4th, 2012 Abstract: This paper discusses the affect of stock index futures for investor sentiment’s measure and study if the new indicator has better interpretation to stock returns than before. Finally, the reflection of the negative emotions on the market is studied by this indicator. Keywords: Investor Sentiment; Stock Index Futures; Stock Return 基于股指期货的投资者情绪对中国股市 影响的实证研究 潘永泉,林 梓 北京科技大学,东凌经济管理学院金融工程系,北京 Email: yqpan@ustb.edu.cn, linziliz@sina.com 收稿日期:2012 年 2 月 6 日;修回日期:2012 年 2 月 26 日;录用日期:2012 年 3 月 4 日 摘 要:本文将股指期货合约作为投资者情绪的度量指标,研究在此基础上构建的投资者情绪指标是 否对于股票收益率有更强的解释能力,并以此研究其对股票市场的消极情绪是否反映的更为充分。 关键词:投资者情绪;股指期货;股票收益率 1. 引言 在之前的研究中,由于我国实际上没有做空机 投资者非理性行为是否会影响股票价格和收益 制,所以在测度投资者情绪时经常采用市场换手率、 是现代金融理论和行为金融理论争论的焦点。现代金 封闭式基金折价和投资者开户增长率等指标,但是, 融理论认为,在某种程度上某些投资者可能并非理 自从 2010......

Words: 1134 - Pages: 5

The Impact of Derivatives on Stock Market Volatility: a Study of the Nifty Index

...AAMJAF, Vol. 4, No. 2, 43–65, 2008 ASIAN ACADEMY of MANAGEMENT JOURNAL of ACCOUNTING and FINANCE THE IMPACT OF DERIVATIVES ON STOCK MARKET VOLATILITY: A STUDY OF THE NIFTY INDEX T. Mallikarjunappa1* and Afsal E. M.2 1 Department of Business Administration, Mangalore University, Mangalagangotri – 574199, Mangalore, DK, Karnataka, India 2 School of Management and Business Studies, Mahatma Gandhi University, P.D. Hills, Kottayam – 686560, Kerala State, India *Corresponding author: tmmallik@yahoo.com ABSTRACT This paper studies the volatility implications of the introduction of derivatives on stock market volatility in India using the S&P CNX Nifty Index as a benchmark. To account for non-constant error variance in the return series, a GARCH model is fitted by incorporating futures and options dummy variables in the conditional variance equation. We find clustering and persistence of volatility before and after derivatives, while listing seems to have no stabilisation or destabilisation effects on market volatility. The postderivatives period shows that the sensitivity of the index returns to market returns and any day-of-the-week effects have disappeared. That is, the nature of the volatility patterns has altered during the post-derivatives period. Keywords: conditional volatility, heteroscedasticity, volatility clustering, market efficiency INTRODUCTION The modelling of asset returns volatility continues to be one of the key areas......

Words: 9589 - Pages: 39

Index Fund

...Topic 2 : Should retail investors invest in index-tracker funds rather than actively-managed funds? Topic 2 : Should retail investors invest in index-tracker funds rather than actively-managed funds In recent years, investment has been interested by the majority of people more than in the past as basically everyone would like generate income and try to find the ways that can actually make money. Not only do investors need to know more knowledge that how to make money investing, but also they have to update news which has information about money’s movement. Moreover, the majority of investors is supposed to follow international news and monitor that show their money in real time. In today’s world, there are many capital markets for investing because if the number of investors increases, it will make the number of investment products in the capital market increased. Thus, investors in these days are supposed to have the way in order to choose which stock will make them make the most investment return. Then, there are two investing’s types in funds for retail investors in order to invest between index- tracker funds and actively- managed funds and most investors are supposed to understand and know which one they have to use. This essay will be discussed investing in index-tracker funds and actively-managed funds that follow by pros and cons, and also provide knowledge that why are retail investors supposed to put their money in index-tracker funds rather than in......

Words: 1732 - Pages: 7