A fundamental analyst uses the discounted cashflow method to value firms, and has a short-term perspective on purchasing stocks and bonds. True or false?
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A fundamental analyst uses the discounted cashflow method to value firms, and has a short-term perspective on purchasing stocks and bonds.
True or false?
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- 1. Which of the following models for mathematics of the financial markets is dependent on expectations or probabilities of changes in the value of an underlying asset? A. Monte Carlo Simulation B. Black Scholes Model C. Cox-Ross-Rubinstein Model 2. Models for the financial markets are primarily used for all of the following, except, A. Algorithmic Trading B. Technical Analysis (Short term trading) C. Fundamental Analysis (Long term investing D. All of the above 3. Which among the following organizations use financial mathematics as part of their core operation? A. Investment banks B. Government C. Hedge funds D. All of the above 4. S1: Quantitative finance helps to allocate resources to provide the optimum returns. S2: Financial models are accurate. A. Both statements are true B. Both statements are false C.…Which of the following is a characteristic of a money market financial instrument? O A. High risk B. Low risk C. Low credit quality O D. Equity instrumentMarket timers focus onusing overall market trends as a basis for predicting when to buy or sell investments. However, they can use valuation techniques on specific financial instruments to support their decision. True or false?
- Derive CAPM and explain the concept of systematic risk. Explain the notion of geometric Brownian motion and hence derive Ito’s lemma. Narrate how inflation impacts present value of cash flow. What do you mean by ‘beauty contest’ and discuss its impact on investment decision of investors in stock market.Why do we use Discount Cash Flow approach to calculate both stock and bond prices? What are the differences between the two calculations?Explain how to use the free cash flow valuation model to find the price per share of common equity.
- If the credit quality of the issuer falls sharply, what is your main concern? a.The share price. b.The volatility of the underlying c.The default risk. d.A rise in risk free interest rates Give typing answer with explanation and conclusion1. What effect does increasing inflation expectations have on the required returns of investors in common stock? 2. Explain the specific relationship between risk and reward and why this relationship must be true.Duration is important in understanding a fixed income portfolio because A. it is used in the capital asset pricing model B. it measures the interest rate sensitivity of a bonds value C. It measures the correlation with a bank's stock price D. It causes contagion
- Choose the correct statement about different types of financial markets: a. Capital market is the market for short-term government and corporate debt securities b. None of these c. Money market is market for long-term financial instruments d. Stock market is the market where participants can issue and trade stocksHow to analysis the Liquidity in Finacial Market analysis?What are the differences between stocks and bonds in terms of predicted future payments? Which sort of investment is regarded to be riskier (stocks or bonds)? Given your knowledge, which investment (stocks or bonds) do you believe is often referred to as "fixed income"?