New York Stock Exchange Identify Essay

Length: 8 pages Sources: 6 Subject: Economics Type: Essay Paper: #26667675 Related Topics: Stock Portfolio, New York City, Stock, Stock Market
Excerpt from Essay :

(Dow Jones and Company, 2009). The DJIA can be used in three principal ways: as a yardstick, as a barometer, or as an investment.

When the DJIA is used as a yardstick, the goal is to measure performance from one period of time to another:

The most common use of an index by investors is to evaluate the performance of their own portfolios on a monthly or quarterly basis. This is the "benchmark" function of an index, and it constitutes the bogey that many investors try to beat with individual stock picks or with mutual funds. There is no official benchmark for the stock market. Each investor chooses his or her own. The only logical requirement is that the benchmark chosen should represent the part of the stock market that is targeted by the investor's portfolio. For example, if the investor dabbles in large stocks from a variety of industries, the Dow Jones Industrial Average might make a suitable benchmark. But if holdings in that portfolio also include some railroad stocks, say, and utilities, the more appropriate benchmark might be the Dow Jones Composite Average, which includes all stocks in the Industrial, Transportation and Utility Averages. (Dow Jones and Company, 2009).

When used as a barometer, the DJIA is used to attempt to predict where the market is headed:

What will happen next? That's the single important question in the stock market, and there never is an always-reliable answer -- just as there isn't with the weather. But that doesn't stop people from making predictions. Like barometers measuring rising or falling air pressure, indexes can be used to help form judgments about the direction in which the market is heading, and whether it is moving tentatively or certainly. There are a host of technical and fundamental analytic techniques for this purpose, with indexes playing a major role in many of them. And because the market looms so large in the U.S. economy, some people extrapolate market behavior into indications of general economic vigor and health. One rule of thumb is that the stock market "anticipates" major trends in the economy by about six to nine months. But in the real word, such precise timing doesn't always hold true. (Dow Jones and Company, 2009).

The final use of the DJIA is an actual investment:

Indexed investing is increasingly popular these days. It is simpler than ferreting out money managers that can beat the market more or less consistently. It is cheaper than "active" portfolio management, which requires a lot of research, because index investors simply buy the stocks in a particular index. It is less nerve-racking than active investment for a lot of people because indexed investors never lose more than "the market," represented by the index. Of course, they never make more than the market, either, but anxiety-averse investors consider that drawback a fair tradeoff for untroubled sleep. (Dow Jones and Company, 2009).

6. Explain what direct costs buyers or sellers of the securities you have identified above (in question 3) would incur in their buying or selling of these securities.

The direct costs that buyers or sellers of the identified securities would incur in buying or selling are difficult to assess, because there are multiple formats for trading stocks. According to E*Trade, a popular online independent stock-trading website that allows buyers and sellers to purchase NYSE listed stocks without using a broker, the cost for stock and options trades would range from $7.99 per trade to $12.99 per trade, with the price declining as the number of trades increased. (2009). In addition to the fee for the trade, the buyer would obviously have to spend the cost of the trade. Customers utilizing traditional brokerage firms would probably pay a higher cost, because they would have to pay brokerage fees.

7. Briefly explain three (3) regulations that are imposed upon companies by the stock exchange in which those companies are listed.

The NYSE imposes multiple regulations on companies listed on the stock exchange. First, the NYSE ensures that a company complies with listing requirements. Financial compliance involves reviewing:

a company's reported financial results both at the time of joining the Exchange and throughout its listing to ensure that it meets original-listing and continued-listing requirements. Criteria include...


When a company falls below any criterion, the Exchange notifies the company and reviews the appropriateness of continued listing. Once notified, in many cases a company has the opportunity to submit a plan to return to compliance within eighteen months. If the Exchange accepts the plan, it monitors the company's performance throughout the plan period. If the company fails to achieve stated goals in a timely manner, the Exchange will move to suspend the security and remove it from the list. If the Exchange does not accept the recovery plan, it will move to immediately suspend the company's security and remove it from the list. (NYSE Euronext, 2009, Financial Compliance).

In addition to financial compliance, the NYSE seeks to ensure that its listed companies comply with certain corporate guidelines. Corporate compliance:

ensures that listed companies adhere to the highest standards of accountability and transparency, including enhanced governance requirements for configuration of corporate boards, director independence and financial competency on audit committees. The Exchange has taken a leadership role in setting standards for corporate governance practices for over a century and has periodically amended and supplemented its standards with a constant focus on investor protection. The governance rules implemented in 2003 and 2004 empower independent directors as representatives of shareholders. They also require enhanced disclosure by listed companies so investors are fully informed with regard to the governance and ethics of companies in which they invest. (NYSE Euronext, 2009, Financial Compliance).

In addition, the NYSE's Market Surveillance division watches to make sure that its listed companies are in compliance with Securities and Exchange Commission (SEC) regulations, and attempts to prevent insider trading:

When Market Surveillance detects possible insider trading that involves corporate employees, officers or directors of a listed company, or members of the public, it refers these cases to the SEC. If cases are prosecuted by the SEC or the U.S. Attorney's office, Market Surveillance may provide expertise, trading data and serve as an expert witness as requested by the SEC. (NYSE Euronext, 2009, Market Surveillance).

8. What form of education is available to the investors to learn more about the products available and the services offered by the exchange.

Because the NYSE is the major stock exchange in the United States, there is almost an infinite amount of education available to investors to learn about the products available and the services offered by the exchange. The NYSE has a very detailed website that provides a good overview of its services and provides links to information on the listed companies. In addition, several publications such as Smart Money, the Wall Street Journal, the New York Times, and Fortune, just to name a few, provide substantial information about products offered on the NYSE. In addition, both and provide good information for the beginning investor.


H.J. Heinz Co. 2009. Shareholder Information. H.J. Heinz Company. Available from: [August 28, 2009].

Dow Jones and Company. 2009. About the Averages: Overview. New York: Dow Jones and Company. Available from: [August 28, 2009].

E*Trade Financial Corp. 2009. Pricing. E*Trade Financial Corp. Available from: [August 28, 2009].

Investopedia. 2009. Stocks Basics: How Stocks Trade. Investopedia ULC. Available from: [August 28, 2009].

Investorwords. 2009. Bond. Fairfax: Available from: [August 28, 2009].

Investorwords. 2009. Security. Fairfax: Available from:

Investorwords. 2009. Stock. Fairfax: Available from: [August 28, 2009].

NYSE Euronext. 2009. Financial Compliance. New York: Reuters. Available from: [August 28, 2009].

NYSE Euronext. 2009. Market Surveillance. New York: Reuters. Available from: [August 28, 2009].

NYSE Euronext. 2009. Timeline. New York: Reuters. Available from: [August 27, 2009].

Target. 2009. Dividend and Stock…

Sources Used in Documents:


H.J. Heinz Co. 2009. Shareholder Information. H.J. Heinz Company. Available from: [August 28, 2009].

Dow Jones and Company. 2009. About the Averages: Overview. New York: Dow Jones and Company. Available from: [August 28, 2009].

E*Trade Financial Corp. 2009. Pricing. E*Trade Financial Corp. Available from: [August 28, 2009]. [August 28, 2009]. [August 28, 2009]. [August 28, 2009]. [August 28, 2009]. [August 28, 2009]. [August 27, 2009]. [August 28, 2009].

Cite this Document:

"New York Stock Exchange Identify" (2009, August 28) Retrieved June 29, 2022, from

"New York Stock Exchange Identify" 28 August 2009. Web.29 June. 2022. <>

"New York Stock Exchange Identify", 28 August 2009, Accessed.29 June. 2022,

Related Documents
Stocks Ordinary Shares of Stock
Words: 1999 Length: 7 Pages Topic: Economics Paper #: 35174541

Seeking to raise more capital," plans to sell about $600 million of convertible subordinated notes" (Mutter, 2000, p. 80). Amazon, at the time, was considered a much more substantial risk than it is currently. The issuance of convertible debt seemed very speculative at the time. Mutter even wrote that investors did not like "the equity-like risk assumed by debt holders" (Mutter, p. 80). but, the investment has paid off

Abu Dhabi Stock Market
Words: 11185 Length: 42 Pages Topic: Economics Paper #: 84510982

A number of economists suggest that markets are efficient, but this efficiency is merely assumed. In this regard, Batten points out that, "There is no actual proof. It is virtually impossible to test for market efficiency since the 'correct' prices cannot be observed. To get over this hurdle, most tests examine the ability of information-based trading strategies to make above-normal returns. But the results of such tests do not

Integrated Waveguide Technologies Preparing for a Public Offering
Words: 1963 Length: 7 Pages Topic: Business Paper #: 71352857

Introduction Distribution policy is a set of principle stipulating the guidelines for cash dividends payout to the shareholders and stock repurchases. Dividends mean the company's earnings distributed to the stockholders declared during the year, interim dividends, or at the end of a financial year referred to as the final dividend. Dividends account as a source of income for the investors but also have an information signaling effect. Therefore, a dividend distribution

New Work Reward Systems New, Improved, Innovative:
Words: 1754 Length: 6 Pages Topic: Business Paper #: 51443301

New Work Reward Systems New, Improved, Innovative: Employee Work Rewards In the book First, Break All the Rules: What the World's Greatest Managers Do Differently, authors Marcus Buckingham and Curt Coffman assert that employee satisfaction is not tied to compensation as tightly as the business world has imagined. Hard though it may be to belief, several key elements reportedly have stronger influence on employee morale and engagement with their work than wages,

Stock Repurchasing Has Become a
Words: 3221 Length: 10 Pages Topic: Business Paper #: 59504727

("Gates, Bill," 2007) the company is in fact considered a regional financial backbone, in the Seattle-Redmond area where its world headquarters are. The whole region and to some extent the whole world takes notice when Microsoft announces financial strategies and changes or when stocks rise or fall. The software maker said it would buy back $20 billion through a tender offer set to be completed on Aug. 17. The company

Portfolio Management Project
Words: 4930 Length: 17 Pages Topic: Economics Paper #: 69381068

Stock Portfolio Management Project Selected 10 companies Company Symbol purchase date purchase price Apple, Inc. APPL Industry/Sector: Technology/Personal Computer -- Investment Style: Large Growth Brocade BRCD Communications Systems Inc. Industry/Sector: Technology/Data Storage -- Investment Style: Small Growth Joy Global Inc. JOYG Industry/Sector: Farm/Const/Mach -- Investment Style: Large Growth CTRP Industry/Sector: Consumer Services -- Investment Style: International Gerdau SA GGB Industry/Sector: Steal & Iron -- Investment Style: International Gol Linhas GOL Aereas Inteligentes SA Industry/Sector: Regional Airline -- Investment Style: International Green Mountain GMCR 10/21/2009 Coffee Roasters Inc. Industry/Sector: Processed Pkgd gds -- Investment Style: Small Growth Rio Tinto PLC RTP 10/21 /