llustrate illiquidity risk and small cap premium
My investment bank told me that beta given by Bloomberg incorporates the illiquidity risk and small cap premium since Bloomberg does well-known Bloomberg adjustment formula. Is it true?
Expert
No. The well-known “Bloomberg adjustment formula” is an arbitrary adjustment within order to converge computed betas to 1 and contains multiplying the calculated beta with 0.67 and adding 0.33 to this. Adj. Beta = 0.67 x raw beta + 0.33. This is significant to point out that such adjustment is fully arbitrary.
Which data is the most suitable for finding betas?
Below are the three-month HIBOR and three-year EFN futures (that is, Exchange Fund Note) prices for the September 2010 contracts.a) Find out the HIBOR in three-months for settling the future contract utilizing the quotation on August 16. Q : Problem on maintaining dividend Jackson Jackson Company has 6 million shares of common stock selling at $55 each. It also has $120 million in long-term bonds with coupon 7%, selling at 90. The tax rate of Jackson is 33%. Next year its EBIT is expected to be $25 million with a standard deviation of $7 millio
Jackson Company has 6 million shares of common stock selling at $55 each. It also has $120 million in long-term bonds with coupon 7%, selling at 90. The tax rate of Jackson is 33%. Next year its EBIT is expected to be $25 million with a standard deviation of $7 millio
Transition Management: It is a financial service accessible to institutional investors who require making significant modifications to their portfolios, like merging, selling, or substantially restructuring them. This procedure can expose investors to
Is there any relationship in between the flow to shareholders and the net income?
What is nonlinearity in option pricing model?
ABC Corp is issuing a 10-year bond with a coupon rate of 7 %. The interest rate for similar bonds is at present 9 %. Supposing annual payments, what is the current value of the bond? (Round to the closest dollar.) (a) $872 (b) $1,066 (c) $990 (d) $945. Q : Define Initial public offering or IPO Initial public offering: An initial public offering (IPO) otherwise called as stock market launch, is the first time company selling stock to public. Usually raised for capital expansion and to become publicly traded company. Investment banking firms
Initial public offering: An initial public offering (IPO) otherwise called as stock market launch, is the first time company selling stock to public. Usually raised for capital expansion and to become publicly traded company. Investment banking firms
Woidtke Manufacturing's stock currently sells for $29 a share. The stock just paid a dividend of $2.50 a share (i.e., D0 = $2.50), and the dividend is expected to grow forever at a constant rate of 9% a year. What st
Money Spreads: Option trading strategies can be classified into various types like those pertaining to combination of one option with another option or set of options, other derivative contracts, stocks, etc. This paper focuses mainly on money spreads
18,76,764
1951680 Asked
3,689
Active Tutors
1412106
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!