Conclusions

Before participating in a stock market, investors compare it with others. In the literature three factors are often considered important for the comparison: stock returns, their associated risk, and cost of trading. Accordingly, in the forgoing we have studied three questions with regard to the seven major Latin American stock markets: (1) How different are the financial, economic, and political conditions of the LAEM from the developed markets and what are the investment laws in the LAEM? (2) What is the cost of trading in the LAEM; is it higher than in the developed stock markets? And (3) does the return determination process in the LAEM differ from those processes documented for the developed markets? The first and second questions were studied in the first part of this thesis (Chapters 2 and 3), while the third question was addressed in the second part (Chapters 4 and 5).