BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Money Has Time Value
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Risk Return Trade Off
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Cash Flows Are Source Of Values
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Market Prices Reflect Information
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Detailed explanation-1: -There are four major factors that cause both long-term trends and short-term fluctuations. These factors are government, international transactions, speculation and expectation, and supply and demand.
Detailed explanation-2: -The efficient market hypothesis (EMH) or theory states that share prices reflect all information. The EMH hypothesizes that stocks trade at their fair market value on exchanges. Proponents of EMH posit that investors benefit from investing in a low-cost, passive portfolio.
Detailed explanation-3: -EMH states that at any given time and in a liquid market, security prices fully reflect all available information. This theory evolved from a 1960s PhD dissertation by U. S. economist Eugene Fama. The EMH exists in three forms: weak, semi-strong and strong, and it evaluates the influence of MNPI on market prices.
Detailed explanation-4: -Economic factors including interest rate changes, financial outlook and inflation all affect share prices. If the interest rate and inflation go up, and the economic outlook is poor, demand will usually decrease, and the share price is likely to come down.