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Investments glossary

Stock Market Capitalization-to-GDP Ratio Definition


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The stock market capitalization-to-GDP ratio is a ratio used to determine whether an overall market is undervalued or overvalued compared to a historical average. The ratio can be used to focus on specific markets, such as the U.S. market, or it can be applied to the global market, depending on what values are used in the calculation. It is calculated simply by the stock market cap divided by gross domestic product.

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