Business Finance - Research and Trades
Research and Trades
EMH
From the Efficient Market Hypothesis which assumes that all information and prices are known by all parties and no person has advantage hence nobody can beat the market with information that is not already known apart from by luck. This can be argued from our points of view that we do not as much information as some. Often prices are delayed so we maybe getting prices that are not what we would like, also a price that we would like to buy at could be taken by those closer to the market i.e. the brokers etc.@@
Portfolio Theory
This states that realistically people are normally risk averse. They would rather invest in low risk low returns rather than more risky investments for high returns.
Risk
As with all investments there can be risk. With cash investments there is normally less risk than that of share investments. These investments normally carry a high financial risk and high rewards also. Often companies can be more liquid or more geared making the risk higher in terms of capital risk as well as currency risk if from another country but they offer the highest rewards or possible losses also. SD
Bid-Ask spread
The Bid-Ask spread is seen as the difference the bid price – what the buyer is willing to pay and the asp price – what the seller is willing to sell it for. The ask price is normally slightly higher than the bid price. The spread is seen as the profit for the broker or specialist. The difference is dependent on many factors but mainly that of the securities liquidity. If a security has high volumes or amounts traded then the bid ask spread will be narrower.
Shares listed on the stock exchange
A stock exchange is part of an overall stock market. A stock exchange provides a platform for traders and brokers to trade stocks as well as other securities. Stock exchanges can be seen as a mutual organisations or corporations. The securities tradable can consist of: company issued shares, unit trusts, bonds and other
EMH
From the Efficient Market Hypothesis which assumes that all information and prices are known by all parties and no person has advantage hence nobody can beat the market with information that is not already known apart from by luck. This can be argued from our points of view that we do not as much information as some. Often prices are delayed so we maybe getting prices that are not what we would like, also a price that we would like to buy at could be taken by those closer to the market i.e. the brokers etc.@@
Portfolio Theory
This states that realistically people are normally risk averse. They would rather invest in low risk low returns rather than more risky investments for high returns.
Risk
As with all investments there can be risk. With cash investments there is normally less risk than that of share investments. These investments normally carry a high financial risk and high rewards also. Often companies can be more liquid or more geared making the risk higher in terms of capital risk as well as currency risk if from another country but they offer the highest rewards or possible losses also. SD
Bid-Ask spread
The Bid-Ask spread is seen as the difference the bid price – what the buyer is willing to pay and the asp price – what the seller is willing to sell it for. The ask price is normally slightly higher than the bid price. The spread is seen as the profit for the broker or specialist. The difference is dependent on many factors but mainly that of the securities liquidity. If a security has high volumes or amounts traded then the bid ask spread will be narrower.
Shares listed on the stock exchange
A stock exchange is part of an overall stock market. A stock exchange provides a platform for traders and brokers to trade stocks as well as other securities. Stock exchanges can be seen as a mutual organisations or corporations. The securities tradable can consist of: company issued shares, unit trusts, bonds and other