Preprint MA 44/2004

A model of stock prices behavior

Jan Melecky

The considered model describes dynamics of intrinsic value and actual price of stocks on the stock markets. The model construction is based on characterization market participants behavior and on relationships between stock market and economical environment. Our model respects different behavior of market participants at undervalued and overvalued market. Our aim is to contribute to study of processes, which influence the price dynamics at the stock markets.