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标题: log of market cap? [打印本页]

作者: tango_gs    时间: 2011-7-13 13:48     标题: log of market cap?

Why do we usually take the logarithm of the market cap in reading 12? For example, look at P306. Why not just take the market cap
作者: YAhmed    时间: 2011-7-13 13:48

it is exponential growth that you are adjusting for.

100->1000 is 10 times increase

plot

100, 1000, 10000

for different time periods
graph looks like upward portion of U

but plot
ln (100), ln(1000), ln(10000)

it is closer to a straight line.

CP




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