How GARCH (generalized ARCH model) model is applied to Stock Price Volatility?

Q: The wider the dispersion of returns on a stock, the:

A: Investors evaluate the portfolio or security on the basis of risk profile. The risk profile can be…

Q: what is the return of stock a what is the return of stockb what is the standard deviation on stock…

A: Given: tate Probability(P) Return A Return B Poor 40% -0.08 -0.15 Normal 35% 0.19 0.14 Good…

Q: n is it appropriate to use the dividend valuation models, such as the Zero Growth Model, constant…

A: Dividend discount model is used or valuation of the companies and quite used frequently.

Q: A class of Efficient Market Hypothesis that implies all public information is calculated into a…

A: Efficient Market Hypothesis is the market theory which depicts that market is generally efficient…

Q: Explain carefully how and why a decline in the required rate of return affects stock values and…

A: The required rate of return is defined as the minimum percentage of return on investment in which an…

Q: How does higher expected growth affect a stock’s value?

A: Stock value is referred to as the shares of the corporation, which used to appear to trade at the…

Q: What are the two components of most stocks’ expected total return?

A: Expected total return refers to the full return of an investment over a certain period of time.

Q: How do you calculate price earnings ratio, given the stocks historical prices?

A: Price earnings ratio is ratio of price per share and earning per share. PE ratio=Price per…

Q: how does diversification prevent individual stock prices from going down

A: Diversification is a method that mixes a wide variety of investments within a portfolio. By doing…

Q: What does the meaning of maximum and minimum price in the stock performance graph? how to know which…

A: Succinctly summarized, a stock chart is a graph that illustrates the price of a stock over a certain…

Q: If there is a stock which is substantially overvalued, where it should plot relatively to the SML?…

A: SML or Security Market Line:- It is an graphical representation of CAPM model. SML graph is being…

Q: discuss what is the stock price?

A: >Stocks, when referred to in relation with the paid in capital of a corporation, refers to the…

Q: Why might the stock price changing make sense within the context of risk and return?

A: Stock price movement is dependent on various factors which would eventually impact the required rate…

Q: Differentiate between the terms expected rate of return, required rate of return, and historical…

A: The expected rate of return is the normal rate of return that the speculation can anticipate. By and…

Q: what would be the stock price?

A: Current stock price refers to the present value of the share based on the future expected payoffs.…

Q: Is stock price maximization good or bad forsociety?

A: Answer: Maximization of stock prices occurs because it benefits the society at large. The stock…

Q: Explain required rate of return on stock

A: The required rate of return is the minimum acceptable rate of return that an investor expects to…

Q: Calculate the expected return for Stock A.

A: Expected Return: It represents the profit or loss expected by an investor on an investment. It is…

Q: Explain realized rate of return on stock

A: Realized Rate of Return on stock gives you the percentage return on holding the stock for a certain…

Q: How do you calculate the beta of stock?

A: Beta is the measure of stock's volatility to the overall market, and is calculated as-

Q: How will you know if you think a certain stock will be more or less volatile in terms of price…

A: Investors have different options to make investments, and the motive behind investments is to…

Q: What is a characteristic line? How is this line usedto estimate a stock’s beta coefficient? Write…

A: Characteristic line With the help of regression analysis, a straight line is being formed which…

Q: The return of stock B is __% The volatility of stock A is __% The volatility of stock B is __%

A: Thank you for posting questions. Since you have posted multiple questions, as per the guideline I am…

Q: Higher a stock’s volatility, why does the higher the probability of large increases or decreases in…

A: Stock Volatility:   Volatility is defined as a statistical measure of the dispersion of the returns…

Q: What effect does Standard Deviation of Stock returns have on call option price?

A: Standard Deviation of Stock Returns:The standard deviation of stock returns represent how much…

Q: Explain which has a stronger effect on stock prices, the change in the interest rate or the…

A: Stock is one of the major securities issued by the companies and an important financial indicator…

Q: What is the expected return on the firms stock

A: Here, Proportion of Debt is 75% Proportion of Equity will be (1-75%) = 25% Cost of Debt is 5% Risk…

Q: What does it mean to say “stock prices are nonstationary”?

A: Stock prices will be discovered by continuous interaction of demand and supply. Stock prices are…

Q: Are stock prices affected more by long-term or short-termperformance? Explain.

A: Answer: The stock prices are influenced by results in both the long and the short term. The…

Q: To estimate the required rate of return on a stock we can use the Capital Asset Pricing Model (CAPM)…

A: The required rate of return on a stock can be defined as a rate of return which an investor would…

Q: define equilibrium in financial markets in another words

A: The market where both buyer and seller interact in order to buying and selling of various financial…

Q: binomial model account of volatility

A: Volatility is simply referred to as the uncertainty or risk in the change in the value of a…

Q: Apart from using PE ratio, what is another way of valuing the stock price? if we have the EPS, Share…

A: Price earning ratio is used to value a company's share price. It is calculated by dividing the…

Q: How do I calculate the weighted bias of stocks?

A: Weighted bias of stocks also known as the price-weighted stock index, where each and every stock of…

Q: What will be the current stock price?

A: The current price of a stock is the most recent selling price of a stock in the market. It is the…

Q: What is the Security Market Line (SML)? How isbeta related to a stock’s required rate of return?

A: Security market line (SML): It could be a line drawn on a graph that works as a graphical…

Q: Stock X has the following data. Assuming the stock market is efficient and the stock is in…

A: The Constant Growth Model was developed by Gordon. This method assumes that a company grows at a…

Q: What are the differences between the two calculations?

A: The discounted Cash Flow method considers the time value of money that discounts the future cash…

Q: How would you use these to evaluate whether or not a current stock price is perhaps to high…

A: The term stock price refers to the current market price of a share of stock, and every…

Q: The constant growth DCF model used to evaluate the prices of common stocks isconceptually similar to…

A: Answer -true.

Q: a) Differentiate between value and growth stocks? Briefly summarise the evidence relating to the…

A: Since you have asked multiple questions, we will solve the first question for you. Please ask…

Q: Divided discount model DDM how to the valuation of the aggregate stock market?

A: What is DDM (Dividend discount model)? The Dividend Discount Model (DDM) is a quantitative strategy…

Q: Given the Efficient Market Hypothesis, do you think we still need to study common stock valuati

A: Introduction : In simple words, the efficient market hypothesis refers to the hypothesis refers to…

Q: Why Are Stock PricesSo Volatile?

A: The prices of stocks listed on stock exchanges are dynamic and change every minute. Volatility is…

Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.