Predicting Liquidity of BSE by Using ARIMA Model

Even with the presence of numerous institutional players in the market, there exist a noticeable number of cash group shares which are hardly transacted. To sustain the growth of investors in the market, there is need for assuring easy and quick liquidity to the securities. To serve the same purpose, the present paper entitled “Predicting Liquidity of BSE by using ARIMA model” is designed. This paper is mainly based on secondary data from which turnover ratio has been figured. The study has been carried out for a period beginning from April 1993 to March 2013. The Sample taken for the study is 240 monthly observations, before the measurement of liquidity. The finding of the paper reveals that the ARIMA of (3,1,3) is the best fitting model when liquidity is denoted in terms of Turnover Ratio