To what extent does investor mood explain price fluctuations? Explain

Q: Why are the following “effects” considered efficient market anomalies? Are there rational…

A: Portfolios of low price-earning (PIE) ratio have been shown to provide higher returns than high PIE…

Q: What are the assumptions of efficient market hypothesis? Discuss.

A: The efficient market hypothesis (EMH) is a hypothesis theory which states that share prices reflect…

Q: Earnings per share can affect market prices of commonstock. Can market prices affect earnings per…

A:

Q: Carefully explain the Arbitrage Pricing Theory (APT). What is the main assumption the APT is built…

A: Market efficiency Market efficiency theory states that all information whether it is private or…

Q: How is the call option price impacted by varying the risk free rate of interest? How is the call…

A: 1) Call option is the contract according to which the buyer of the option has the right but not the…

Q: Is the statement that a pproject that is unacceptable today might be acceptable tommorrow given a…

A: Yes , the statement is correct. Any changes related to market returns affects project of a company.…

Q: What is the price volatility component of daily earnings at risk?

A: The acronym DEAR stands for Daily-earnings at risk. To understand the price volatility component,…

Q: What is the random walk hypothesis, and how does it apply to stocks? What is an efficient market?…

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

Q: What happens when investors rate of return is greater than YTM and coupon rates?

A: The coupon rate of a bond is the annual rate of interest it pays, whereas the yield is the rate of…

Q: Why are options being sold at prices higher than their strike value?

A: Option: An option is a special type of contract which gives its holder the right but not obligation…

Q: What is the reason for investors to track moves in the yield curve? Please discuss in more depth and…

A: A yield curve is a graphical representation of the different interest rates that the bonds yield but…

Q: what does Market's Risk premium measure

A: Market's Risk premium is an important term used in the capital asset pricing model equation (CAPM)…

Q: Even if behavioral biases do not affect equilibrium asset prices, why might it still be important…

A: Answer: There exist two reasons why the behavioral biases do not impact equilibrium asset prices.…

Q: What does market equilibrium mean? If equilibrium does not exist, how will it be established?

A: Introduction: Market equilibrium is nothing but that the marginal investors assume all shares are…

Q: Which tranches in a CMO issue are least subject to price variances related to changes in market…

A: The Tranches are various layers of investors in a collateralized mortgage obligation. There are four…

Q: Explain Price Return Swap?

A: A derivative contract which enables two parties to exchange financial instruments, cash flows,…

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 does the usage of technical analysis mean for the theory of market efficiency?

A: Market efficiency:- Market is said to be ‘efficient’ only if the price of every security in the…

Q: Is yield to maturity a valuable factor to take into account? Won't knowing the coupon rate be…

A: Yield to maturity is referred to as the total return that are anticipated on bond when the bond is…

Q: Why is the t-bill's return independent of the state of the economy? Do t-bills promise a completely…

A: Treasury bills (T-bills) are a kind of short-term debt that is issued by the government with the aim…

Q: Describe how commodity futures markets can beused to reduce input price risk.

A: The futures are the types of financial derivatives in which two parties entered into a contract to…

Q: Explain a flat yield curve using the segmented market theory.

A: Mаrket  segmentаtiоn  theоry  is  а  theоry  thаt  lоng  аnd  shоrt-term  interest  rаtes  аre  nоt…

Q: The underlying assumptions of technical analysis are that A.price move in predictable patterns B.…

A: Technical analysis aims at predicting the price movements of securities by using market statistics…

Q: What is market risk premium?

A: Market risk premium is an additional return investor will receive for holding the additional risk in…

Q: How do the price/earnings (P/E) ratio and the market/book (M/B) ratio provide a feel for the firm's…

A: The financial ratios refer to the ratios that are calculated using the financial data from the…

Q: How can we reduce o reduce the effect of market volatility on our holdings?

A: Market volatility is a term that describes the level of stock and bond market instability based on…

Q: Illustrate the market interest rate to find the net present worth?

A: Investors frequently find the present worth of the fund flows for the reason that savers receive the…

Q: what are the assumptions about market efficiency ?

A: Market efficiency refers to the market situation where stock prices reflect all available &…

Q: Which type of market efficiency is not true? Why

A: An efficient market is one where the market price is unbiased and reflects all known information. If…

Q: Why the following effects are considered efficient market anomalies? Are there rational explanation…

A: Market anomalies are referred to a situation where the stock prices are not changed as per the…

Q: Whats the difference between a price momentum strategy and an earnings momentum strategy. Under what…

A: In order to receiving better returns after specific period of time, investors plan to invest first.…

Q: Technical analysts believe that investors can use past price changes to predict future price…

A: Like Fundamental analysis, Technical analysis is alsoan analysis tool used by various day traders…

Q: n efficient market hypothesis and what are anomalies in the efficient market hypothesis?

A: Efficient market hypothesis is hypothesis explain the pricing in the market of equity and market…

Q: What are the TRIN Statistics and Cofidence Index and what do their values describe about the bullish…

A: The Trading Index is also known as Arms index. The name Arm’s index is decided on the name of the…

Q: Why does market bubble occur?Discuss.

A: A market bubble occurs when the prices of a stock rise extremely high than its actual fair value. It…

Q: Convexity is the difference between O actual price change and duration-predicted price change O…

A: Convexity measures the curvature

Q: Explain the term Market Timing strategies?

A: THE MARKETING TIMING STRATEGIES IS GIVEN BELOW-