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Security Analysis and Portfolio Management - Essay Example
Author : cmohr
Finance & Accounting
Pages 5 (1255 words)
SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT Name: Tutor: Course: College: Date: Securities refer to assets of an organization that carry a financial value. Securities are also tradable assets. Security analysis incorporates methods that aid in the calculation of the value of various such assets and the impact of market fluctuations on the value of those securities or financial tradable instruments…
On the other hand, the intuition for the growth stocks that the stocks have higher prices in the market compared to their book value creates the definition. These findings were made when the two scholars Fama and French tested the leverages, book market ratios and price earnings ratios among others in an effort to examine the Capital Asset Pricing Module. 2. Factors explaining stock returns. The Capital Asset Pricing Model is a method published in 1992 and that has been popular in portfolio management. Analysis has brought it to question since the model does not satisfy the questions of stock management entirely (Yue et al 2006). The limitations of CAPM lie in the assumption that investors need measure only a single risk that will determine the sensitivity of market returns. The model required to be efficient is therefore supposed to address a number of factors that pose as a risk to security management (Fama and French). The measures should address sensitivity of the market returns by distinguishing small stock risks over risks posed by larger stocks. ...
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