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Investment Theory

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

364 Questions

Can you buy a bond after it has been sold out on the primary market?

Bonds are traded both in the primary market, which is the initial sale of the bonds, and in the secondary market, which is the sale of bonds subsequent to the initial sale by the issuer or underwriter.

How do you buy stock in the company?

Stock (equity) can be bought during the original first public issue by a company and by the secondary market (stock market)

How many companies are listed under SEBI?

SEBI stands for Securities and Exchanges Board of India. It is the governing body for all stock market related instruments in the country. No company is listed in it.

Companies are listed either in the NSE or the BSE which are the registered stock exchanges in the country

What is the best penny stock for 2011?

The best penny stock for 2011 is BGEM (BLUE GEM) although they distribute mostly in Florida they have a weapon that will make them richer then rich. This is TITLE of course the new all natural sports drink. Better tasting, better for you sports drink.

This company is very promising and Title is very promising too!

CONS: Attacking the Gatorade is never a good ideal. BUT someone has to come along some time and say what needs to be said screw gatorade....

What does the Securities Exchange Act require public companies to do?

The act requires publicly held companies to file annual audited financial statements (on Form 10-K) with the SEC.

Is a mutual fund a high risk?

Mutual funds vary in their level of risk. Mutual funds that hold treasury bonds would be considered low-risk (although they may not keep up with inflation). Mutual funds that track broad-based indices, like the S&P 500 index, are considered moderate risk, as they are entirely invested in equities, but are diversified across many sectors of the economy. Mutual funds that focus on high-growth stocks would be considered high-risk, as they are concentrated in stocks that may have volatile prices and they are typically not diversified.

What is the advantages and disadvantages of multiple regression analysis?

Advantages:

The estimates of the unknown parameters obtained from linear least squares regression are the optimal.

Estimates from a broad class of possible parameter estimates under the usual assumptions are used for process modeling.

It uses data very efficiently. Good results can be obtained with relatively small data sets.

The theory associated with linear regression is well-understood and allows for construction of different types of easily-interpretable statistical intervals for predictions, calibrations, and optimizations.

Disadvantages:

Outputs of regression can lie outside of the range [0,1].

It has limitations in the shapes that linear models can assume over long ranges

The extrapolation properties will be possibly poor

It is very sensitive to outliers

It often gives optimal estimates of the unknown parameters.

What does the daily volume traded means to the investor?

It reflects the liquidity of that market. The more shares, barrels of oil, pork bellies that are traded means that product is easier to sell (more liquid) so the price of that product is more accurate and adjusts smoothly rather than jumping.

You can also look at it in terms of supply and demand. If the volume traded is low then it suggests less people are willing to sell, meaning the product may cost more. The flip side of this is there may be few people willing to buy.

For securities with large numbers of outstanding shares, for example, the volume traded normally is a response to news or changing market conditions.

A Ryzner

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.

What are put and call in stock market?

Puts and calls can be either futures (which require the contract's buyer to complete the transaction at a certain price on a certain date) or options (which allow, but don't require, the buyer to complete the transaction on the certain date for the certain price).

A put buyer either can or will sell to the put seller the stock named in the contract.

A call buyer either can or will buy from the call seller the stock.

Investing in a widely diversified portfolio of stocks does not eliminate the risk that the whole market rises and falls?

no. If you are not a stock riots investor you should diversify because diversification is just protection against ignorance because a real investor won’t care about fluctuations in the market because they will care about the underlying value of a security. If you aren’t a serious investor then you should diversify. if you are a serious investor then you shouldn’t diversify because you know what your doing and you prefer down times so you can buy more undervalued securities.

Which is the highest stock for today?

I think the only thing high is you. I think Warren Buffet's stock Berkshire shares are the highest priced stocks in the world. But that's because he hasn't split the stocks to make them more affordable since first created.

How does an initial public offering constitute a primary securities?

INITIAL PUBLIC OFFERING i.e.IPO IS HAVING A PRIMARY SECURITY BECAUSE ITS SHARE PRICE IS DECIDED BY SEBI .i.e.SECURITIES & EXCHANGE BOARD OF INDIA & NOT BY THE COMPANY IN INDIA

Is it true people who invest in the stock market will automatically make money?

  1. Foreign participation rate was strong, Inflow of funds of around RM10.7 billion into the equity market.
  2. inflow was in line; bucking the trend in Asia which experienced an outflow.

bursa-malaysia-trading-signals.blogspot.com/2017/09/foreign-participation-rate-strong_12.html

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.

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.

How can you learn about stock market in Malayalam?

Visit Hedge Securities or Angel Broking. They conduct regular classes. Hedge is bringing out a magazine called "Ohari". You may subscribe to it.

What is Liquidation of Funds?

It means the sale of all assets of a fund and the distribution of the assets to all the share holders. This generally means shareholders were forced to sell at a time not chosen by them.