how can we help you on your risky capital assets pricing
TRANSCRIPT
It is in everybody’s wish to gain rewards from their
investment funds. Given fluctuations in the market
economy, this can affect your investment securities
in a good or bad manner. There are two methods
that the investor gets rewarded from funds they put
in place for the securities. The first one is the time
value of money where investors are compensated
by placing investment funds or money over a
period of time. This represented by the risk-free
rate in the standard capital asset pricing model of
investment portfolio theory. When you invest R500
in a mutual fund for 5 years and that the fund will
grow by annual rate 10%. Then after a year the
value of your fund will be R6 600 inflation-risk free.
The second one is the systematic market risk
which entails that the risk is correlated with the
expected return on an investment.
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C o n t a c t U s
The market risk entails that higher gains from an
investment are associated with taking more risk. In
analysis of our 3 core securities which are shares,
bonds and mutual funds, market risk remains the
most important element. In most instances it is
measured using the Standard & Poor 500 index of
500 listed performing stock companies in the world
market economy.
In the South African market, macroeconomic
factors such as the real interest rate, CPI inflation
and GDP economic growth affect these 3
securities. Now having this, how do we go on
pricing these risky security assets? Our
methodologies have been developed to let you
know on which stock to invest and when to invest.
For those who invest in mutual funds, the rewards
VolTAnalytics electric current for our African clients
from stock performances especially on
those which trade in shares will bring
better rewards for mutual funds. To
determine optimal close share price,
we can consider market forces of
demand and supply. The stock
company’s opening price, earnings and
dividends are important components to
determine the close price in market
fluctuations.
Lower earnings hamper expected
returns in shares. Also if the stock
performs poorly, then this can also
hamper it. Generally this represents
aggressive stocks with a market risk
rate above 1. When the market is
favourable, aggressive stocks can lead
to higher expected returns. Being the
opposite, defensive stocks they come
with low expected returns as the risk of
investing is less. We deal with both
complicated cases of defensive and
aggressive stocks in bringing analysis
for a wise investment decision-making.
This is some consulting you have to…
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Within these industries, we do
consulting with most of the well-known
South African and International brands.
We offer them a range of services that
HOW CAN WE HELP YOU ON YOUR RISKY CAPITAL ASSETS PRICING
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