Abstract:
With the increased acquaintance and interest in investing, investors are getting more conscious
about gaining the knowledge regarding which markets offers the relatively more secure investment
opportunities in this volatile and uncertain environment. Therefore this research project pursues
to find out and analyze the impact of the four of the most important and discussed variables that
can have impact on the stock market returns including currency exchange rate, gold prices, oil
prices and interest rates. The data of these variables has been taken from Pakistani market for the
period of 2008 to 2015. This paper analyzes the short-term and the long-term impact of these
variables on stock returns individually as well as their combined effect.
The study is structured as follows: the first section specifies contextual information about the
research study and what has been uncovered by researchers throughout the world in explaining
the relationship between the chosen variables and then the variables are discussed; the second
section is about the research methodology and a theoretical framework. Then this paper
progresses to the results by using some major and basic types of analysis tools of statistics i.e.
Correlation, Simple Regression Modelling and Multiple Regression Modelling and Descriptive
Statistics, gives an exhaustive investigation and comparison of data gathered with the already
prevalent literature in this regard. In the end, our research study settles with the hypothesis testing,
with concluding remarks and possible reasoning of the relationship between the variables.
Keywords: Correlation, Multiple Regression Model, Stock Market, Interest Rate, Karachi Stock
Exchange and KSE-100 Index, Oil returns, Gold returns, Forex returns.
