The Relevance of International Stock Market

Decades were required to restore humankind faith in investment in limited liability companies. Eventually, however, in clod trading in company shares were renewed in the coffee houses in the City of London, the financial and trading marrow located within metropolitan London. In 1773, the world's first formal tune market was established with the formation of the British broth Exchange in the City of London.

Informal trading in the shares of limited liability companies began in the American Colonies around 1725, tailfin years after the S discoverh Sea Bubble. This trading grew out of an auction market that had developed at the foot of hem in Street in New York City. The auction market dealt extensively in commodities, particularly wheat and tobacco. The trading of financial securities was easy introduced into the auction market.

Informal securities trading in the American Colonies go along to grow at a steady pace. Trading in financial securities was stimulated to a significant extent, however, in 1790, sequent to the American Revolution. In 1790, Alexander Hamilton, as Secretary of the Treasury, in the post-Constitution government of the United States, recommended that the new federal government line of descent all Revolutionary War bonds issued both by the Continental Congress and the governments of the 13 colonies.

The mingled international stock markets do tend to exhibit different behaviors (Roll, 1992, pp. 3-41). The trio factors that explain most of the disparity are major power construction differences, differences in national industrial structures, and exchange range behavior (Roll, 1992, pp. 3-41). Some indices, that of the London subscriber line Exchange as an example, tend to be more diversified than others (Roll, 1992, pp. 3-41). The New York wrinkle Exchange, function an deliverance with a broad industrial structure, is not as susceptible to severe effects by a downturn in a single industrial area as is a stock exchange serving an economy with a narrow industrial structure.

The Frankfurt Stock Exchange, serving an economy based on the exceedingly stable German mark, tends to be somewhat less volatile than the London Stock

In London, the United Kingdom has a drive outdoned its restricted and highly regulated market, and has replaced that market with a truly international stock market (Parker, 1991, pp. 55-65). There exists some belief that this transition willing allow the London Stock Exchange to eventually come in as the single stock market for the European Community.

Applications of computing machine technology are also changing the international pillow slip of the stock market (Cap, 1989, pp. 713- 715). Advanced technology has made feasible instantaneous financial transactions on a world-wide basis. The growth of significant financial markets in Asia, as a complement to those in Western Europe and the United States has created a demand for 24-hour per day, seven-day per week trading. Initially, major investment banks in the three world regions offered their services to investors in each of the other regions with this advanced technology, during the normal hours of operation in their home countries. This dodging was soon followed by the creation of subsidiary investment banking firms in each of the other regions, a strategy which enabled those investment ban
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