Financial Management - Study Mode

[#371] An efficient market hypothesis states all public information which is reflected in current market prices is classified as
Correct Answer

(D) semi strong efficiency

Explanation

Solution: An efficient market hypothesis states all public information which is reflected in current market prices is classified as semi strong efficiency. The semi-strong form efficiency is a type of efficient market hypothesis (EMH), which holds that security prices adjust quickly to newly available information, thus eliminating the use of fundamental or technical analysis to achieving a higher return.

[#372] In expected rate of return for constant growth, an expected dividend yield must be
Correct Answer

(B) constant

Explanation

Solution: In expected rate of return for constant growth, an expected dividend yield must be constant. The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR).

[#373] Value of stock as concluded with help of analysis by particular investor is classified as
Correct Answer

(D) Both B and C

Explanation

Solution: Value of stock as concluded with help of analysis by particular investor is classified as intrinsic value and fundamental value.

[#374] In expected rate of return for constant growth, an expected yield on capital must be
Correct Answer

(D) equal to expected growth rate

Explanation

Solution: In expected rate of return for constant growth, an expected yield on capital must be equal to expected growth rate. Growth rates typically represent the compounded annualized rate of growth of a company's revenues, earnings, dividends or even macro concepts, such as gross domestic product (GDP) and retail sales. Expected forward-looking or trailing growth rates are two common kinds of growth rates used for analysis.

[#375] Capital gain is Rs 2 and beginning price is Rs 24 then capital gains yield will be
Correct Answer

(D) 12.00%

Explanation

Solution: Capital gains yeild = Beginning price / Capital gain = 24 / 2 = 12.00%.