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the Federal Open Market Operation Committee (FOMC) reduced the federal funds target range in two...

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Finance

the Federal Open Market Operation Committee (FOMC) reduced the federal funds target range in two unscheduled meetings in the month of March: first, to 1 to 1.25 percent on March 3, 2020 (Tuesday) and then to 0 to 0.25% on March 15, 2020 (Sunday). The Dow Jones Industrial Average (DJIA) fell by more than 800 points on March 3 and more than 700 points on March 16 following these announcements. In fact, the DJIA fell by more than 7000 points between March 3 and March 23 followed by these monetary policy announcements amid the COVID-19 pandemic. Use the appropriate stock price valuation model to explain the effect of these monetary policy announcements on the stock prices.

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