<p>It is easy to see that oil has a big part in our economy, by looking at the repeated news from the media and at the stock market, where they follow the oil price very closely. Behavioral finance is about investors making small or big mistakes in the stock market. Behavioral finance describes the importance of understanding your own faults, as well as others investor’s faults. Behavioral finance emphases the importance of not assuming that the financial market is a flawless environment, but to understand the psychology behind investment decisions. The essays purpose is to explain how the oil price effect investment decisions in the stock markets in Sweden, Norway and Denmark. I have chosen to use regression analysis to statistically see how the oil price is affecting the stock price for 11 stocks in the three different countries. The result shows that the oil price affects all the oil company’s stock prices and three other stock prices. The result also shows that the oil price is affecting the number of bought stocks for all the company’s in the essay. The conclusion is that the oil price has a positive effect on the trade in the stock market. If the oil price increases, then the number of bought stocks increases too. It is interesting to see that the numbers of bought stocks do not only increase for the oil companies, but also for the companies whose stock price is not affected by the oil price. To explain this behavior I have chosen to use the Behavioral finance theory.</p>

It is easy to see that oil has a big part in our economy, by looking at the repeated news from the media and at the stock market, where they follow the oil price very closely. Behavioral finance is about investors making small or big mistakes in the stock market. Behavioral finance describes the importance of understanding your own faults, as well as others investor’s faults. Behavioral finance emphases the importance of not assuming that the financial market is a flawless environment, but to understand the psychology behind investment decisions. The essays purpose is to explain how the oil price effect investment decisions in the stock markets in Sweden, Norway and Denmark. I have chosen to use regression analysis to statistically see how the oil price is affecting the stock price for 11 stocks in the three different countries. The result shows that the oil price affects all the oil company’s stock prices and three other stock prices. The result also shows that the oil price is affecting the number of bought stocks for all the company’s in the essay. The conclusion is that the oil price has a positive effect on the trade in the stock market. If the oil price increases, then the number of bought stocks increases too. It is interesting to see that the numbers of bought stocks do not only increase for the oil companies, but also for the companies whose stock price is not affected by the oil price. To explain this behavior I have chosen to use the Behavioral finance theory.