FINS1612 Study Guide - Final Guide: Tax Rate, Quick Ratio, Stock Market Index

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5 Nov 2018
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F fixed interest securities are more volatile and, as such, will generate higher average returns than shares in publicly listed corporations. F systematic risk refers to the risk that derives from factors unique to a particular company. T portfolio theory contends that the imperfect correlation characterising the returns of different securities is the basis for an investment strategy that can reduce the total risk of a portfolio. T a share that has a beta of 0. 50 is half as risky as an average share listed on a stock market. F if new economic information comes to the market, shares that demonstrate a zero price correlation will tend to move in opposite directions. T a company"s liquidity, that is, its ability to meet its short-term financial obligations, may be measured using the current ratio and the liquid ratio. Of the two ratios, the latter is the more stringent measure.

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