ASSESSING THE ROLE OF MACROECONOMIC VARIABLES ON STOCK PRICE VOLATILITY: A CASE OF PAKISTAN STOCK EXCHANGE

Abstract

The purpose of executing this research study was to assess the role of macroeconomic variables on stock price volatility. Specifically 10 companies were chosen that are listed on the Pakistan Stock Exchange. The following are the objectives which were devised for this study, to understand the basic concepts and features of stock exchange with respect to investments and economic development; to identify important and appropriate macroeconomic factors having influence on stock prices and to evaluate the impact of macroeconomic variables on stock price volatility in the context of companies listed on the Pakistan Stock Exchange. We adopted secondary method for data collection and the results extracted through correlation and regression analysis displayed that macroeconomic variables including interest rate, inflation rate and the corporate tax rate affect share prices of companies operating in Pakistan.