Admission Open for 2019-20
SUBJECT : Financial Management
AUTHOR : Mohammed Arif pasha
PUBLISHED ON : 19/12/17
NUMBER OF PAGES : ( 17 Pages)
PRICE : Rs 10.2

The two key determinants of share prices are expected risk and return. Greater the risk assumed higher will be the return. Investments which carry low risk such as government securities will offer a low rate of return. Any rational investor would analyze the risk associated with the particular stock and a thorough knowledge of risk helps him to plan his portfolio so as to minimize the risk associated with the investment. Return on investment may be because of income, capital appreciation or a positive hedge against inflation. Income is either interest on bonds or debentures, dividend on equity or preference shares. The financial managers must understand these concepts as they have a bearing on share prices as well as the valuation of the firm.