Stats

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Introduction
In the current economy, the change in the economical condition is highly manifested in the region. The prices of the stock returns keep on fluctuating from time to time. This is articulated to the changes in the economic conditions of the individuals, employment patterns of the investors and also the income e outlay of the investors in the economy. Over the past decade, there has been gradual increase in the prices of the stock and therefore it was easy to predict its price over a long run. This is not the case immediately after the effect of the global crisis experienced in the early 2008. The effects were adverse to the prices of the stocks and therefore, until recently, stock prices have never been constant
Statement of the problem
The economy has experienced volatility in equity markets for the past decades. The analysis focuses on the major changes in historical volatilities and the correlations of inter-markets. Its main intent is to measure volatility but not the controls of events leading to volatility in financial markets. After the review of the historical volatility changes and the market interrelationships, the analysis puts into consideration the adverse effects of macroeconomic impact where excessive volatility is felt. The analysis also curtails the major initiatives and financial reforms made in order to assuage the impact of stock price inconsistency; it includes limiting volatility in the stock market by imposing trading halts, legal leverage that is available to the investors in form of financial assets are limited, exchange trade patterns altered in order to accommodate the quantity available, and also the transaction costs are raised.
The analysis provides that over the past decades, there has been a tremendous increase in the market volatility of the available stock returns in the market. Despite this, the measures do not provide a more coherent impression of the effect of the changes in the stock returns. The high-volatility incidents have led to revert of market volatility measurements to relatively lower levels.
Methodology
The method of data collection used in coming up with the above results is the distribution of questionnaires to the intended target population and also performing interviews. The research design to be used in analyzing the data collected is the descriptive method. The concern is to identify the characteristics of various variables that lead to the market volatility of the stock returns in the economy. The concern also is to determine who, what, when, how much variable will be influenced or changed by a slight change in other variables.
Hypothesis
* Limiting the volatility of the stock prices in the stock market will stabilize the rapid changes in the stock prices. This is done by imposing trade halts
* Limiting legal leverage available to investors in the form of financial assets will impose a relative stability in the stock prices.
* Altering of exchange trade patterns will foster stability in the stock market prices by accommodating the stock volume
* Increasing of transaction costs will prevent investors from selling of their stocks to various individuals will be curtailed.
Limitations of the study
* Some of the individuals interviewed and issued with the questionnaires to fill may be illiterate and therefore end up providing information which is irrelevant and inaccurate
* The stock market department in which the study focuses has its staff and employees decentralized in different locations and therefore costly in terms of transport and time
* Respondents not willing to provide certain information required for the study because they need approval from the heads of the department
Statistical techniques
Following the inherent changes experienced in the stock market, the data collected is analyzed by use of linear regression. This will show whether the variables selected for analysis have a direct relationship to the changes in the stock prices and also whether they have full effect to the volatility.
According to the research undertaken, the major focus was stipulated on the increasing of the transaction in order to lower the stock market volatility. Data was collected from different countries which had imposed such initiative to its stock prices. The figures were taken in a cluster period of ten years and the average stock market volatility was represented as in the table below for different countries;
Period/
Country

1961-1970

1971-1980

1981-1990

1991-2000

2000-2010

Belgium

3.28

3.60

3.68

3.72

3.78

Canada

3.85

4.26

4.71

4.78

4.86

Finland

3.51

3.62

3.68

3.72

3.85

France

3.15

3.18

3.24

3.26

3.32

Germany

3.24

3.32

3.38

3.42

3.51

Ireland

3.10

3.15

3.18

3.23

3.34

Italy

3.24

3.45

3.49

3.56

3.64

Japan

4.20

4.24

4.36

4.42

4.44

Netherlands

3.25

3.36

3.39

3.45

3.56

Norway

3.14

3.18
...