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Question No: 03 This is a subjective question, hence you have to write your answer in the Text-Field given below. Mr. Madan Lal had purchased
Question No: 03 This is a subjective question, hence you have to write your answer in the Text-Field given below. Mr. Madan Lal had purchased 300 shares of Asian Paints a few years ago when it was selling for Rs. 1100 per share. We are given that the share price of Asian Paints today is Rs. 1750 per share. Now answer the following questions: a. Mr. Madan Lal asks his broker to put in a stop loss order on Asian Paints at Rs. 1650 per share. Explain succinctly as to the rationale for Mr. Madan Lal's action. [2] b. If the stock price subsequently declines to Rs. 1450 per share what would be Mr. Madan Lal's rate of retum assuming that the stop loss order in place (as per part (a) above). [1.5] C. If the stock price subsequently declines to Rs. 1450 per share what would be Mr. Madan Lal's rate of return without the stop loss order. [1.5) d. In our class we discussed about the three forms of the efficient market hypothesis. Name and clearly but succinctly explain each of the three forms of the efficient market hypothesis. [2]
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