The Effect of trading volume and high P/E ratio on the price bubble in Tehran stock exchange market
Subject Areas : Journal of Investment Knowledge
Mostafa. Zandieh
1
(Associate Professor, Shahid Beheshti University)
Rouzbeh. Ghouchani
2
(Master of Business Management, Islamic Azad University, Science and Research Branch)
Keywords: trading volume, P/E ratio, bubble price, Tehran stock exchange market,
Abstract :
In this study, we tested the effect of high trading volume and high P/E ratio on the price bubble in Tehran stock exchange market. In this study, trading volume and P/E ratio are independent variables, and price bubble is dependent variable. In this study, At first we took a sample from the statistical population that includes all the accepted companies in the Tehran Stock Exchange Market by Cochrane method, then data accumulated by Rahavard Novin software, then we distinguished existence of price bubble by the run test method and finally the relation between variables of the hypothesis were tested by linear regression. At the Tehran stock exchange market we are witnessed high rate volatilities of total index from 1385 till now. Experts find the root of stock exchange market crisis in different things; some of them consider bubble price as the reason of the crisis. According to the results of testing the hypothesis of the research from 1385 until bahman 1391; First, low trading volume increases the bubble price; Second, high P/E ratio directly affects the bubble price.