Changes in interest and stock market prices reaction

The primary objective of the investment in stock companies is profit like many other investment opportunities and possibilities. Investment in shares has solved the problem of indivisibility of big plans and stock market facilitates investment in securities. Another problem of investment in physical assets, as the lower liquidity ability, is resolved by investing in shares. The present study is descriptive and correlation-based with applied results and is done with the aim of the effect of changes in interest stock market prices reaction to interest change. The statistical population of the study consisted of all companies listed on Tehran stock exchange (from 2007 to 2011 that 176 companies were selected as the sample using systematic sampling (systematic elimination)). The required data was collected using Rahavard Novin software and information bank of stock market and the research hypothesis was analyzed using correlation and regression tests. The results show that there is a significant relationship between interest changes and stockholders’ wealth and stock market prices shows positive reaction to positive profit and shows negative reaction to small profit.

Keywords:

stock brokers , cash profit , dividend , stock exchange