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Market Capitalization: Often referred to as market cap, it refers to the value of a company, that is, the market worth of its outstanding shares. A common misconception is that the higher the stock price, the superior the company. Stock price, though, may misrepresent a company's actual value - if we compared the two companies by solely looking at their stock prices, we would not be comparing their real values, which are impacted by the quantity of their outstanding shares. Historically, large caps have experienced slower growth with lower risk. Meanwhile small caps have experienced higher growth potential, but with higher risk.
Earning per share Earnings per share (EPS) are computed as profit attributable to equity divided by the number of shares in issue and ranking for dividends. EPS therefore repr
Reinvestment risk is the risk involved in reinvesting the proceeds received from the issuer against callable bonds. During falling interest rate periods, investor canno
Q. Is Conservatism an investment strategy? Conservatism - An investment strategy aimed at long-term capital appreciation with low risk; moderate; cautious; opposite of aggressi
ARROW as an FSA's risk based approach to regulation ARROW stands for Advanced, Risk-Responsive Operating Framework. In January 2000, FSA set out a proposed approach to regulati
1. In this query the implied volatilities are calculated by using a risk free interest rate of 2%. The computation are summarized by the following figure. 2. The computatio
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Q. What do you mean by synergy? Synergy: synergy refers to the greater combined value of merged firms than the sum of the values of individual units. It is something like one p
Explain and compare the costs of hedging via the forward contract and the options contract. Answer: There is no up-front cost of hedging through forward contracts. Though, in t
what are the key stages in capital investment decision-making process and the role of investment appraisal in this process?
Question 1: You hold a diversified portfolio consisting of a Rs.5,000 investment in each of 20 different common stocks. The portfolio beta is equal to 1.15. You have decided t
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