The volatility of stock market returns: Application of Monte Carlo simulation

Abstract

Stock exchange is the "mirror" of the economy and helps industry (and commerce) to accelerate the development of the country. The prices on the stock exchanges increase or decrease over the particular period and that rate represents stock market volatility. Higher stock price volatility is often associated with higher risk and indicates future fluctuations to investors in order to evaluate them. Predicting future stock price volatility can provide important information to market participants and enable them to make adequate decisions. The aim of this paper is to evaluate the stock price volatility of the Apple Company using the Monte Carlo simulation.