23 July 2002 an article entitled “Investors Appreciate Dividends Again, See Them as Safer Bets in Bear Market,” appeared on Associated Press Newswire. The article described two reasons why financial planners have routinely recommended that investors hold dividend-paying stocks, especially in bear markets such as the period 2001-2002: First, retired investors use quarterly dividends to augment their income find dividends to be more attractive during bear markets. Second, investors search for a bird in the hand, which dividends represent. In this respect, dividends provide investors with the ability to be patient, and wait out the market decline. The article quotes Steve Wetzel, a professor of finance at New York University's School of Continuing Education and a certified financial planner, and Arnie Kaufman, editor of Standard & Poor’s newsletter The Outlook. Please discuss both reasons mentioned above.

23 July 2002 an article entitled “Investors Appreciate Dividends Again, See Them as Safer Bets in Bear Market,” appeared on Associated Press Newswire. The article described two reasons why financial planners have routinely recommended that investors hold dividend-paying stocks, especially in bear markets such as the period 2001-2002: First, retired investors use quarterly dividends to augment their income find dividends to be more attractive during bear markets. Second, investors search for a bird in the hand, which dividends represent. In this respect, dividends provide investors with the ability to be patient, and wait out the market decline. The article quotes Steve Wetzel, a professor of finance at New York University's School of Continuing Education and a certified financial planner, and Arnie Kaufman, editor of Standard & Poor’s newsletter The Outlook. Please discuss both reasons mentioned above.

Fundamentals of Financial Management (MindTap Course List)

15th Edition

ISBN:9781337395250

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 7TCL

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Similar questions

An investor receives an investment newsletter that recommends that she invest in a stock that has doubled the return of the S&P 500 in the last two months. It also claims that this stock is a "safe bet" for the future. Which of the following statements is correct regarding this information? The investment newsletter contains contrary information since the stock must be a high risk and therefore cannot also be a "safe bet." This investment newsletter is most likely correct because they most likely have some special knowledge about the stock. It is common for individual stocks to double the return of the S&P 500 and still be a "safe bet."
3) An investor is considering to take a short position in the CIB stock. After analyzing the market to take a decision the investor found the average daily trading on CIB to be 2,640 while the long trade positions are 1,082. Should the investor go ahead with this short sale or not? Support your answer quantitatively and with an explanation
2D3) Alpha Trading Analysts discovered from looking at charts of past stock prices that if she buys just after a stock price has declined for three consecutive days, she makes money every time! This is a violation of ________ market efficiency. weak form. semi-strong form. strong form. Investor confidence.
Reflection paper about this principle Principle #2: Expect Volatility (unexpected changes) and Profit from itinvesting in stocks means dealing with volatility. Instead of running for the exits during times of market stress, the smart investor greets downturns as chances to find great investments. Graham illustrated this with the analogy of "Mr. Market," the imaginary business partner of each and every investor. Mr. Market offers investors a daily price quote at which he would either buy an investor out or sell his share of the business. Sometimes, he will be excited about the prospects for the business and quote a high price. Other times, he is depressed about the business's prospects and quotes a low price.
You have determined the price of a common stock (Apple, Google, etc.) will increase substantially over the next few months. In order to participate, make a profit, you could: I. Buy the stock today and sell it later for a profit II. Buy a Call Option with an exercise price believed to be lower than the future value III. Sell a Put Option with an exercise price believed to be higher than the future value. O A. I only O B. Il only O C.Il only O D.I, II. & III
Choose one appropriate statement. 1. The movement of stock prices have certain patterns, and investors can make profits by studying such patterns. 2. If a hedge fund manager believes that Toyota will going to outperform Honda she will short stocks of both companies. 3. When one share of Apple stock is being traded at $150, the stock market believes that you can always sell a share of Apple stock for at least $150 in the future. 4. O An undervalued stock should outperform the market in the long run. 5. O Diversification is not appropriate because it would prevent investors from capitalizing on the superior return that can result from a concentrated holding of the stock of one successful company.
The term short selling is the O Selling of a security that was purchased by borrowing money from a broker O Selling of a security that is not owned by the seller. O Selling of all the shares -you own in a company in anticipation that the price will decline dramatically O Betting that a stock will increase by a certain amount within a given period of time.
You work in a derivatives section in an investment bank. In August, a customer who holds Texa stock priced at $150 is worried that the stock will fall in price by the end of the year. Assuming the stock does not pay a dividend, can you sell the customer an option that insures that if the stock price falls below $145, their stock plus option payoff will never fall below $145? Explain.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
An investor buys a stock if price rises 5% from the 250-day low and shorts a stock if price falls 5% from the 250-day high. What is this strategy called? Will it work if the market is efficient? Explain why
Yinzhou is an investment adviser of CBMC Fresno Inc., and one of his client intends to invest in a stock that plots below the security market line (SML). What would be the appropriate recommendation? O Invest; The expected return is high relative to the risk. O Don't invest; The risk is high relative to the expected return. O Invest; All stocks revert to the SML over time. O Don't invest; All stocks below the SML are low-growth stocks.
19. Investors access real stock-price quotes minute-by-minute even on a smart phone. So why does Finance then put forth the scientific or theoretical Equation Four below for stock-price (Po) when the fact of each stock price is so readily listed? Equation Four: Po W Divi Diva (1 + r.)² Divi (1+r) Div. + (1+r)