M1
Explain how through valuation multiples that contain the price and another variable you could determine if the company presents an investment opportunity
If its ratio is below average, the stock is undervalued.
Definition of a risk-free asset:
Actual returns are equal to expected returns.
What happens if demand exceeds supply?
There is a price increase
Industry with greater representation in most valuable brands.
Technology
How do you get the performance from one period to another?
Ln(pt/pt-1)
Method that values a company by comparing it with similar companies
Relative or multiple valuation
Explain why government securities are the only risk-free securities.
Because they control the currency emission, they should at least be able to keep their promises in nominal terms.
Explain the double crossover strategy of moving averages.
When the shorter MA crosses up the longer MA, the stock is in an uptrend.
Which is the most valuable brand according to the article analyzed?
Apple
How can we define "risk"
Deviation away from the expected historical returns.
Type of investment that takes advantage of exchange rate fluctuations.
Foreign Exchange Market - Forex
If the intrinsic value is above the market, the asset is...
Undervalued
What does an RSI under 30 indicates?
the stock/instrument is oversold
What do technical analysis advocates believe?
Everything that affects prices is reflected in the market price
Mention two Nobel Prize winners you have identified in the course.
Harry Markowitz - Portfolio Theory - Basic Portfolio Model
William Sharpe - Relationship between return and risk.
How is the market cap calculated?
Multiplying the price of a stock by its total number of shares outstanding.
What gives value to a brand?
The ability to generate profits / performance
Explain why the P/B ratio is higher in technology companies than in retail companies.
Due to the amount of intangibles.
Brand Value; Intangible assets.
Bonus Points
Enjoy
When did Markowitz win the Nobel Prize?
In 1990
Define "investment"
(It must contain the 4 main elements)
Allocation of funds over a period of time to receive a rate of return for the risk we assume.
What does a beta greater than 1 indicate?
Greater volatility relative to the market.
What signal does an undervalued asset give?
Buy
Unreasoned judgment or prejudice that affects our decision making process.
Bias
When did Markowitz established the Modern Portfolio Theory?
In the 50's