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Macro Measures in the U.S Auto Imdustry

The S&P 500 Index is calculated using a base-weighted aggregate methodology. In this approach, the level of the S&P 500 Index reflects the total market value of all 500 component stocks relative to a particular base period. The total market value of a company is determined by multiplying the price of its stock by the number of shares outstanding. The S&P 500, therefore, is a composite index, wherein an indexed number is used to represent the total market value at a specific time in relation to the base period value of the index.

Projected 18-month trend: The value of the S&P 500 Index is projected to increase approximately 24.6 percent over the 18-month period ending 30 September 2006, which reflects an average annual increase approximating 16.4 percent.

Probable effects on the automobile manufacturing industry in the United States: The projected rate of change in the S&P 500 Index is sufficiently high to increase the probability that sales of luxury (high price) automobiles in the United States will increase over the coming 18 months. Consumers in the target market for lower cost automobiles likely will not share in the benefits of the high level of equity stock appreciation should the projections be accurate. The probability of growth in luxury vehicle sales, however, may be of little consolation to automobile manufacturers in the United States because the luxury automobile products of European and Japanese manufacturers are increasingly the choice of Americans consumers in this target market.

Currency Exchange Rate. The term "exchange rate" refers to the rate required to exchange one currency for another in the international currency markets. The basic approach to defining the exchange rate between two currencies is a "spot rate", i.e., the rate at which two currencies could be exchanged at a specific time. A long-term (or real) exchange rate reflects a weighted- average exchange rate over a specified period, such as a...

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Macro Measures in the U.S Auto Imdustry. (2000, January 01). In LotsofEssays.com. Retrieved 19:40, October 31, 2014, from http://www.collegetermpapers.com/viewpaper/1303663916.html
 
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