Thesis (MSc) - Cyprus International University. Institute of Graduate Studies and Research Accounting and Finance Department

Includes bibliography (sheets 45-49)

In this study, the main analysis is concerning the French stock market index (CAC 40) based on how is functioning and which factors are impacting it in global way. This study planned to explain how the main factors which are our independent variables are affecting the global French stock market index. The stock traded volume which is also impacting directly the index price for example the high volume of stock traded will may decrease the normalized average price which is the index price. CAC 40 index is one of the European stock indexes, which represent the forty biggest firm present in the market according on their market capitalization. That means their value is the main factors which will allow them to be part or to be one of those 40 largest companies in market. Moreover, the study detected and obtained evidence concerning the impacting of the main independent factors on the CAC index with the econometric methodology. Thus, the CAC 40 is sensitive particularly to Euro volatility as it is the index based on the most multinational corporation in Europe, this will generate to have a large amount of foreign investment in other word to attract more foreign investors. So, according to that information a strong Euro will allow for French's companies to buy imports outside the Eurozone cheaper, while a low value of Euro define French exportation will be more competitive in those areas. According to this, we will use econometric analysis to see how those variables are related and which of them lead the others. In the series that we will use, we remarked that all of them are stationary and strongly significant. We analyzed all variables and we find that some of those variables, dependent and independent lead and some not.