MIS 111 Lecture Notes - Lecture 7: E-Governance, E-Government

• School: University of Arizona
• Department: Management Info Systems Main
• Course: MIS 111
• Professor: W.Neumann, M.Patton

Document Summary

Stocks provide a key instrument for holding personal wealth as well as a way to diversify, spreading and reusing the risks that we face. For companies, they are one of several ways to obtain nancing. Sticks and stock markets indicate the value of the companies issued the stocks and allocate scare investment resources. The stock markets role in the economy. Stock prices tell us the market value of companies which determines the allocation of resources. Every major country in the wold has a stock market (exchange) and each of these markets has an index, suck as: Shifts in investor psychology may distort prices; both euphoria and depression are contagious. When investors become unjusti ably exuberant about the market"s future prospects, prices rise regardless of the fundamentals, and such mass enthusiasm creates bubbles. Bubbles are persistent and expanding gaps between actual stock prices and those warranted by the fundamentals. These bubbles inevitably burst, creating crashes which can destabilize the real economy.