Question

How does information affect value versus actual return? What are some key contributing factors? (short answer)

Answer 1

Ans:

• There is direct or indirect relkationship between information and stock market return.
• It is mostly associated with the information released from those departments who controls the economy. These institute are leading in the country or global. If central bank of any country or say Federal reserve or U.S make changes in the bank rate this information might pose impact on the economy of country, This may increse or decrease the supply or demand of money.
• The investment and development done by some leading companies of country release information in next day morning newspaper, which have the tendency to affect stock price of that company in the stock exchange.
• Hence this information directly creates loss / gain for the investors in terms of expected return from that company.
• Like wise some contributing factors as follows:
• Inflation rate, fiscal rate or tax rate, dividend rate, repo rate, reverse repo rate,stock market volatility,