Question

5. Compare and contrast between fundamental and technical analysis. Which in your opinion would derive the best investment outcome? Hint: Short term vs long term investment objectives.

Answer 1

5. Question is incomplete and we require some more information to solve the question.

4. All the above classes offers the returns which are different from each other. The Government T-Bill is totally a risk free return, which ensures the guranteed return even when there is high volatility in the market. This is a risk free return.

Large Cap common stocks are the stock of the company which are holding the large capitalization in the market.

Long term corporate bonds are the debt market instruments which are basically the bonds that are issued by the company to raise funds instead of issuing the common stock. These funds are basically securitized against the asset of the company

Small cap stock are the stock of the company which are holding the small capitalization in the market.

These above investment types differs in returns as because of the following factors:

1. Tax: Tax plays a important role in the return. The return which we are getting from the investments, if it is taxable, then the net return will surely be of less amount.

2. Economic Growth Rate:

3. Inflation

4. Technological Development

5. Availability of finance from the market.

6. Other factors like depriciation, market coditions, government policies. etc.