Open AccessStock Prices and the Rate of Return Analysis: The Case of Warsaw Stock Exchange
Author(s) -
Magdalena Jasiniak
Publication year - 2018
Publication title -
financial assets and investing
Language(s) - English
Resource type - Journals
eISSN - 1804-509X
pISSN - 1804-5081
DOI - 10.5817/fai2018-1-2
Subject(s) - stock (firearms) , stock exchange , financial economics , econometrics , economics , statistical analysis , monetary economics , business , finance , statistics , mathematics , geography , archaeology
The main aims of this article are to verify whether rates of return might be determined by stock prices and to evaluate low price anomaly on the example of Warsaw Stock Exchange. The author states that cheap assets characterized by nominally lower prices are more attractive to buy and bring higher profits in comparison to assets described as expensive. In order to verify the hypothesis, database of 13789 quotations from 1.07.1999 to 30.12.2013 was created. The sample was divided into three groups – cheap, average, and expensive stocks. Finally, the statistical analysis was conducted using 2924 records including only cheap and expensive units. Statistical analysis confirms that low–priced assets generate higher profits and lower losses.