State whether the following statements are true or false. Efficient Market Hypothesis means Securities are normally in equilibrium and are “fairly priced. The market is IN equilibrium when the required rate of return larger than the dividend growth rate.
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Question 2: State whether the following statements are true or false.
Efficient Market Hypothesis means Securities are normally in equilibrium and are “fairly priced.- The market is IN equilibrium when the required
rate of return larger than thedividend growth rate.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
