1. The broadest stock index in the United States is the Wilshire 5000. Plot this
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1. The broadest stock index in the United States is the Wilshire 5000. Plot this index (FREDcode: WILL5000PR) over the period from 1971 to the present (quarterly)
2. Plot the percent change from a year ago of the Wilshire 5000 (FRED code: WILL5000PR).Discuss the behavior of changes in the index before, during, and after recession periods, which are indicated by the vertical, shaded bars on the graph (quarterly).
3. Do changes in stock values affect the wealth of households? Beginning in 1971, plot on a quarterly basis the percent change from a year ago of the Wilshire 5000 (FRED code: WILL5000PR) and the percent change from a year ago of household net worth (FRED code: TNWBSHNO). Compare the two lines.
4. The Dow Jones Industrial Average is a well-known index of equity prices but includes only 30 stocks. Consider a much broader measure of the stock market –the market value of corporate equities in nonfinancial corporations (FRED code: MVEONWMVBSNNCB) –which sums the price of each stock times the number of outstanding shares. After plotting it(from 1971), comment on its pattern since the mid-1990s.
5. In question 3, you looked at changes in household net worth, in question 4 you examined stock market wealth. Aside from stock market wealth, what other assets contribute to household net worth?
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