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Investment Theory

Topics include Efficient Market Hypothesis, Capital Asset Pricing Model (CAPM), Arbitrage Pricing Theory, and investment strategies

1,119 Questions
Index Funds and ETFs
Investment Theory
IPOs

What if the efficient market hypothesis is interpreted in a weak form a semistrong form and a strong form How can you differentiate its various forms?

The efficient market hypothesis (EMH) states that at any given time, security prices fully reflect all available information. There are three common forms to describe the efficiency of the market: Weak form efficiency, Semi-strong form efficiency and Strong form efficiency, each of which have different implications for how markets work. But if markets are efficient and current prices fully reflect all information, then buying and selling securities in an attempt to outperform the market will effectively be a game of chance rather than skill.

1.The "Weak" form asserts that all past market prices and data are fully reflected in securities prices. In other words, technical analysis is of no use.

2.The "Semistrong" form asserts that all publicly available information is fully reflected in securities prices. In other words, fundamental analysis is of no use.

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Business Plans
Investment Theory
Mutual Funds

Which recovery method usually involves an evasion efforts and is dependent on the IP's condition?

IP is Intellectual Property.

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Stock Market
Investment Theory
Stocks

Is YouTube a company where you can buy stocks from?

No, Youtube was acquired by Google. So, you can technically own Youtube by owning Google.

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Investment Theory
Investing and Financial Markets
Economics
2008 Economic Crisis

Explain the major factors that influence the kind of exchange rate system a country has?

Foreign Exchange being a commodity like any other commodities tends to fluctuate in price from time to time. There are various factors that cause the fluctuation in the rates of exchange; * Rising interest rates cause 'hot' money to flow into the economy, therefore the demand of the domestic currency increases, and thus the currency appreciates in value and demand. * Relative inflation rates, affect the economy's international competitiveness, so if the economy is experiencing higher inflation rate than its trading partners, its purchasing power is eroded and thus the demand for that particular currency. * Speculation normally affects the currency value when there is belief that a particular economy is 'over heating' and that soon there will be devaluation, then chances are high that, speculators will pull out their monies, causing there to be more supply than demand on the Forex for that particular currency, hence its depreciation. * International trade affects the value of a currency, particularly through how much export or imports a nation may have, countries selling so many goods and services to others, tend to appreciate their Forex standards and those importing highly normally have their currency fall in value since they are spending more to their trading partners than they gain from them. * Political and psychological factors are believed to have an influence on exchange rates. Many currencies have a tradition of behaving in a particular way for e.g. Swiss franc as a refuge currency. The US Dollar is also considered a safer haven currency whenever there is a political crisis anywhere in the world. * Governments sometimes participate in the Forex market to influence the value of their currencies, either by flooding the market with their domestic currency in an attempt to lower the price, or conversely buying in order to raise the price. This is known as Central Bank intervention. However, the size and volume of the Forex market makes it impossible for any one entity to "drive" the market for any length of time.

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Business Plans
Economics
Investment Theory

Public sector aims?

No.

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Business & Finance
Investment Theory

What are the functions of the major financial markets?

Comptition

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Languages and Cultures
Bahamas
Investment Theory
Islands

If you are from the Bahamas what does that make you?

Probably really tan! Bahamian. And it is NOT pronounced like Bohemian...that describes someone from Bohemia in Europe, not The Bahamas. The second "a" in Bahamian is a hard "a". So its "bah", like bah bah black sheep, "hame", "ian". It's really not that hard to pronounce! Your are actually right it is bahamian and if you were going to barabadoes it is bashian pronounced (BAY-SHIN)

181920
Investment Theory

What are the 4 goals of marketing?

1.maximize consumption

2.maximize costumer satisfaction

3.maximize choice

4.maximize like quality

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Index Funds and ETFs
Investment Theory

What is devident?

it is the amount of profit distributed to the shareholders

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Investment Theory

What is difference between open end and closed end economy?

Open economy's will export & import goods and services.

Closed economies put heavy restrictions on importing goods and services. The closed economies can put restrictions on through tarrifs, and laws to protect it's citizens jobs, resources, and management.

Some have mixed economies like Russia. The airline industry in Russia will only hire Russian Piolets. This is creating a shortage of piolets and therefore increase the wages for the jobs. However, Russia still imports many other goods & services.

Another example of closing the economy is Thiland is restricting the export of rice. Thiland is the #1 exporter of rice in the world. This is creating shortags world wide and felt most severly in African nations.

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Stock Market
Investment Theory
Stock Options and Futures

Advantages and disadvantages of the stock market?

The advantage is that it helps us manage our money... The disadvantage is that when it crashes... then we practically lose all our money.

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Investment Theory
Stocks
Probability

How does a portfolio with 2 stocks decrease if both stocks are increasing?

The value of a portfolio may decrease when the stocks are increasing in price if the portfolio owner is making bets that the stocks will decrease in price. One way to do this is by short selling ('shorting') a stock. This essentially means you borrow the stock and then immediately sell it, in the hope that the stock will decrease in value so you can buy it back at the lower price (the opposite of buying a stock and hoping for an increase in value).

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Business Accounting and Bookkeeping
Investment Theory
Online Jobs

How do you earn through Online Share?

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Salary and Pay Rates
Investment Theory

What is the process by which money makes more and that money makes more?

This is compound interest.

The problem is inflation and income taxes. Lets say you were getting 4% interest and inflation is running at 3%. If you got $1000 in interest after the loss in value of your principle you true interest is only $250, but the income tax in not based on that. You are charged interest on $1000. At 28% your tax would be $280. As you can see with a $280 tax on $250 you are getting ripped off.

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Investing and Financial Markets
Investment Theory
Investment Banking

What is investment ratio?

it is the rati used in calculating the no and amount of funds investors contibuted to a company it is the rati used in calculating the no and amount of funds investors contibuted to a company it is the rati used in calculating the no and amount of funds investors contibuted to a company

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Abusive Relationships and Domestic Violence
Stock Market
Investment Theory
Stocks

Why does your husband stock you?

Because he is psycho! Make sure if you are feeling uneasy about his unusual behavior to document everything. If you still don't feel safe, go to your local police station and fill out a restraining order. Do not become a victim, take a stand.

192021
Investing and Financial Markets
Stock Market
Investment Theory
IPOs

What is Stock Exchange index number and how is it measured?

Indicator divided by 100%

111213
Stock Market
Investment Theory
IPOs

Primary markets can not function well without secondary markets?

Primary markets can not function well without secondary markets

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India
Investment Theory
Stock Options and Futures
Stocks

When was television introduced in India?

1959

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Colonial America
Investment Theory

What were the basic themes or goals of progressivism?

Democratizing government

Efficiency & good government

Regulation of giant corporations

Social justice

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Investing and Financial Markets
Calculus
Investment Theory

How do stock market analysts use calculus?

Analysing the stock marketinvolves a lot of probability theory, which is very heavy on calculus.

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Business & Finance
Politics and Government
Investment Theory

Are public utilities in the private sector?

No government sector, such as water.

151617
Investment Theory
IPOs
Mutual Funds

Guidelines for primary market by SEBI?

Not all company's can issue shares to the public. SEBI has provided a list of requirements that need to be met by a company if they wish to go public. A company that wishes to go public needs to meet all of the below mentioned criteria…

Entry Norms I or EN I:

1. Net Tangible assets of atleast Rs. 3 crores for 3 full years

2. Distributable profits in atleast 3 years

3. Net worth of atleast 1 crore in 3 years

4. If there was a change in name, atleast 50% of the revenue in the preceeding year should be from the new activity

5. The issue size should not exceed 5 times the pre-issue networth of the company

To provide sufficient flexibility and also to ensure that genuine companies do not suffer on account of rigidity of the above mentioned rules, SEBI has provided 2 alternate routes to company's that do not satisfy the criteria for accessing the primary market. They are as follows:

Entry Norms II or EN II:

1. Issue shall be only through the book building route with atleast 50% allotted mandatorily to Qualified Institutional Buyers (QIBs)

2. The minimum post issue face value capital shall be Rs. 10 crores or there shall be a compulsory market-making for atleast 2 years

Or

Entry Norms III or EN III:

1. The "Project" is appraised and participated to the extent of 15% by FI's/Scheduled Commercial Banks of which atleast 10% comes from the appraiser(s).

2. The minimum post issue face value capital shall be Rs. 10 crores or there shall be a compulsory market-making for atleast 2 years

3. In addition to the above mentioned 2 points, the company shall also satisfy the criteria of having atleast 1000 prospective allotees in future.

151617
Stock Market
Investment Theory
Stocks

What is market anomalies in efficient market?

The main feature of efficient markets is that they are not predictable. For example, if the stock market (e.g. NYSE) is efficient, it follows that it is impossible to predict what prices of stocks will be in the future. Market anomalies happen when some prices in the market turn out to be predictable. The most important anomaly is probably the value anomaly: stocks that have a low market value compared to their accounting value (ie "value stocks", with high book-to-market value) tend to outperform stocks that have a large market value relative to their book value (ie "growth stocks" with low book-to-market stocks). Another example is the so-called "momentum" anomaly. It says that stocks that have a large return during a certain period will tend to continue having larger return than other stocks for some time.

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Investing and Financial Markets
Stock Market
Investment Theory
Stocks

What should you invest in the stock market?

Well, you might want to invest money that you don't need. I mean a small portion. money for your rent, groceries savings , etc.. shall not be invested in the stock market. most people invest small amounts so that can sleep well at night.

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