Assignment Outline
The economy is never steady and it never follows a predetermined course. There are various factors that influence the functioning of an economy, and as such the functioning of a financial market, and thereby force it to experience period of boom or recession. The various securities that are traded in these markets, whether government or private, also get influenced by these factors and experience fluctuations in their stock prices, in the case of shares, and in their yield, in the case of government bonds and securities. In most cases, it is easy to analyze and understand the cause behind the trend that emerge when one studies minutely the ups and downs in the stock price of a security.
Following these lines, in this report, an attempt to study the trends of three stocks has been made and to analyze the factors that influence the prices of these stocks. The stocks under observation are:
- Canadian National Railway (CNR)
- Ballard Power Systems Inc (BLD)
- MEG Energy Corporation (MEG)
In addition to these stocks of public companies, it would also be necessary to make a study of government bonds to understand how they influenced by market trends and in return what their contribution is. The government bonds under observation are:
- Government of Canada Bond, with maturity period of 10 years
- Government of Canada Bond, with maturity period of 5 years
- Government of Canada Treasury Bill, with maturity period of 90 days
In this report, apart from studying the trends for a period of 60 days of the securities mentioned above, an attempt would be made to understand the causes behind fluctuations in the market, the relationship between the securities in different markets and how economic principles govern the market trends. The data for the purpose of analysis and comparison has been collected from online newspapers and websites that offer historical data about stock prices of companies and government securities yield. Also company websites, where required, have been consulted to study financial reports and understand trends in cash flow for the desired period of 60 days.
