1.1 INTRODUCTION Every investment is characterised by return and risk. The concept of risk is intuitively understood by investors. In general‚ it refers to the possibility of incurring a loss in a financial transaction. But risk involves much more than that. The word ‘risk’ has a definite financial meaning. The possibility of variation of the actual return from the expected return is termed risk. Corporate securities and government securities constitute important
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A stock market or equity market is a public entity (a loose network of economic transactions‚ not a physical facility or discrete entity) for the trading of company stock (shares) and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. The size of the world stock market was estimated at about $36.6 trillion at the beginning of October 2008.[1] The total world derivatives market has been estimated at about $791 trillion face or nominal
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Jeremy Peav Mr. Sherr Per. 3 4/29/13 The Stock Market The stock market is a very important variable in the economy. The stock market is where shares or stock are issued and traded either through exchanges or over-the-counter markets. It is also known as the equity market‚ it is one of the most vital areas of a market economy as it provides companies with access to capital and investors with a slice of ownership in the company and the potential of gains based on the company’s future performance
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AUTOZONE Q#1. How has AutoZone’s stock price performed over the previous five years? What other financial measures can you cite that are consistent with the stock price performance? AutoZone’s shareholders had enjoyed strong price appreciation since 1997‚ with an average annual return of 11.5%. Over the previous five years‚ AutoZone’s stock price has increased dramatically. On February 1. 2012 the stock price was $348 compared to the $125 on February 1. 2007. The strong price appreciation
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Definition of ’Stock Market Crash’ A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events‚ economic crisis or the collapse of a long-term speculative bubble. Well-known U.S. stock market crashes include the market crash of 1929 and Black Monday (1987). Investopedia explains ’Stock Market Crash’ Stock market crashes wipe out equity-investment values and are most harmful to those who rely on investment returns for retirement
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Demise- Were there warning signs? Enron’s stock price traded around $62.72 per share at the end of April 2001. Do you think Enron was worth that much? Why or why not?‚ answer: In order value stocks one has to understand the possible future earnings of the company represented as earning per share. Since Enron has not quality financial representations‚ those figures are not easy to identify. Relying on big financial intuitions’ data we may come up with a stock value which would be a conservative
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The stock market has the reputation of being a risky investment‚ it did not appear that way in the 1920s. With the mood of the country exuberant‚ the stock market seemed an infallible investment in the future. As more people invested in the stock market‚ stock prices began to rise. This was first noticeable in 1925. Stock prices then bobbed up and down throughout 1925 and 1926‚ followed by a strong upward trend in 1927. The strong bull market enticed even more people to invest ‚ And
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FINANCIAL MANAGEMENT – I RISK AND RETURN ANALYSIS SUBMITTED TO DR. SUSHMA VISNANI BY ABHISHEK DAS AVANIKANT MISHRA DAUD QIDWAI ANKIT TRIPATHI APURBA PRASAD NATH CONTRIBUTION Our project deals with Banking industry. In the project the various banks which are taken into account are Allahabad Bank‚ Canara Bank‚ Punjab National Bank‚ State Bank of India‚ and Union Bank of India. Each of the group members took up each of the bank and did their respective analysis. The banks which were
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Chapter 8 Analysis of Risk and Return © 2015 Cengage Learning. All Rights Reserved. May not be scanned‚ copied or duplicated‚ or posted to a publicly accessible website‚ in whole or in part. Introduction This chapter develops the risk-return relationship for individual projects (investments) and a portfolio of projects. The principles can also be applied to securities. © 2012 Cengage Learning. All Rights Reserved. May not be scanned‚ copied or duplicated‚ or posted
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1."Why is expected return considered forward-looking? What are the challenges for practitioners to utilize expected return?" (Cornett‚ Adair‚ and Nofsinger‚ 2012‚ p. 246). Expected return is “forward-looking” in the sense that it represents the return investors expect to receive in the future as compensation for the market risk taken. The challenge is that practitioners cannot precisely know what the future holds and thus what the expected return should be. Thus‚ we create methods to estimate the
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