Research on Experiences of People on The Problem of Understanding Equities

Title: –    Experiences of People on The Problem of Understanding Equities

Author: – Rahul Surve (21230023039) 

                 Nakshatra Jain (21230023353)

                  Abhishek Yadav (21230023406)

Batch: Finance – 3 (F3)

Introduction: – Understanding equities is critical to financial literacy and investment strategy. Equities, commonly known as stocks or shares, represent ownership in a company. Investors buy these shares in the hope that the company will perform well, leading to an increase in the value of their investment. However, the problem of understanding equities goes beyond the simple concept of ownership.

Objectives: – To understand the underlying phenomena of this problem.

Literature review: – The stakes taken by investors providing equity financing can be significant; thus, profits going to the business owners are reduced. Even small common stock investors get a share of the profits. Moreover, investors may want to be consulted whenever you plan to make decisions that will impact the company. Equity markets are the meeting point for buyers and sellers of stocks. The securities traded in the equity market can either be public stocks, which are those listed on the stock exchange, or privately traded. Often, private stocks are traded through dealers, which is the definition of an over-the-counter market.

Testing of Hypothesis-

H0: μ=3

H1: μ≠3

Data Collection-

  1. I find it challenging to understand the concept of equities.
  2. I struggle to interpret financial reports related to equities.
  3. I am unsure about the risks associated with investing in equities.
  4. There is a lack of educational resources that help me understand equities.
  5. I often second-guess my understanding when making equity-related choices.

These 5 questions were asked in Google form were students and for every question standard deviation, standard error, mean and t-stat were calculated.

Data analysis-

Question

MEAN

Std. Dev.

Std. Error

T- stat

Result

I find it challenging to understand the concept of equities.

2.99

1.096

0.109

-0.091

Neutral

I struggle to interpret financial reports related to equities.

 

3.1

1.105

0.110

0.905

Neutral

I am unsure about the risks associated with investing in equities.

3.14

1.064

0.106

1.316

Neutral

There is a lack of educational resources that help me understand equities.

3.24

1.280

0.128

1.875

Neutral

I often second-guess my understanding when making equity-related choices.

3.2

1.064

0.106

1.880

Neutral

 

Conclusion:

  • I find it challenging to understand the concept of equities.
  • T-stat is -0.091 which is between 1.96 and – 1.96 we accept the null hypothesis, which is negative more than 1.96. It means people are neutral towards the statement.

 

  • I struggle to interpret financial reports related to equities.
  • T-stat is 0.905 which is between 1.96 and – 1.96 we accept the null hypothesis, which is positively less than 1.96. It means people are neutral towards the statement.

 

  • I am unsure about the risks associated with investing in equities.
  • T-stat is 316 which is between 1.96 and – 1.96 we accept the null hypothesis, which is positively less than 1.96. It means people are neutral towards the statement.

 

  • There is a lack of educational resources that help me understand equities.
  • T-stat is 1.875 which is between 1.96 and – 1.96 we accept the null hypothesis, which is positively less than 1.96. It means people are neutral towards the statement.

 

  • I often second-guess my understanding when making equity-related choices.
  • T-stat is 1.88 which is between 1.96 and – 1.96 we accept the null hypothesis, which is positively less than 1.96. It means people are neutral towards the statement.

References

https://docs.google.com/spreadsheets/d/1nzYNIwQ2cbCoFiTMRp8iPVhgZvu7pVd_PcfSh8ZnekI/edit?usp=sharing

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