The study of equity securities is important for many reasons.
- First, the decision on how much of a client’s portfolio to allocate to equities affects the risk and return characteristics of the entire portfolio.
- Second, different types of equity securities have different ownership claims on a company’s net assets, which affect their risk and return characteristics in different ways.
- Finally, variations in the features of equity securities are reflected in their market prices, so it is important to understand the valuation implications of these features.
Equity Securitiesin Global Financial Markets
