Investmentz Analysisz &z Portfolioz Managementz (FIN630) VU
Lessonz #z1
INTRODUCTIONz OFz INVESTMENT
Investmentziszaztopiczinzwhichzvirtuallyzeveryonezhaszsomeznativezinterest.zAtzazcollegezcampus,z
aznumberzofzstudentszfromzastronomyztozzoologyzseekztozgainzadmissionztozanz electivez investm
entsz classz inz thez Collegez ofz Businessz Administration.z Eveningz adultzeducationzclasseszwithzti
tleszsuchzasz“FundamentalszofzStockzMarket”zarezcommon.
Mostzreaderszofzthiszbookzarezenrolledzinzazcollege-
levelzinvestmentzcourse.zForzmanyz students,z thisz coursez willz bez thez onlyz timez theyz everz for
mallyz studyz investmentsz inz azclassroomz sitting.z Thez successz ofz anz individualz investmentz pr
ogramz hasz lifelongzramifications,zsozsoakingzupzaszmuchzofzthiszmaterialzaszpossiblezcanzbezadv
antageous.zAristotlezsaid,z“Thez educatedzdifferzfromzthezuneducatedz asz muchz asz thez livingzfro
mzthezdead”.zThiszideaziszespeciallyztruezwithzregardsztozinvestmentzeducation.
INVESTINGz DEFINED:
Anzeconomistzsayszwhenzpeoplezearnzazdollar;ztheyzdozonezofztwozthingszwithzit:ztheyzeitherzcons
umezitzorzsavezit.zAzpersonzconsumeszazdollarzbyzspendingzitzonzsomethingzlikezazcar,zclothing,z or
z food.z Peoplez alsoz consumez somez ofz theirz moneyz involuntarilyz becausez theyzmustzpayztax;za
zpersonzsaveszazdollarzbyzsomehowzputtingzitzasidezforzconsumptionzatzazlaterztime.
Azdistinctionzcanzbez madezbetweenzsavingzandzinvesting.zSavingzinvolveszputtingz moneyz away
z withz little,z ifz any,z riskz savingz dollars.z Puttingz moneyz inz az bankz certificatez ofz depositz orzazpassb
ookzaccountziszsaving.zAzsaverzknowszthezfuturezreturn,zandzthezaccountziszprobablyzinsuredzbyzth
ezFederalzdepositzInsurancezCorporationz(FDIC),zazgovernmentzagencyzthatzprotectszdepositorsza
gainstzbankzfailure.zInzthezshort-run,zsavingzinvolveszfewzworries.
Investingzalsozinvolveszputtingzmoneyzaway,zbutzinzazriskyzendeavor.zBuyingzshareszofzstockz inz
azNewzYorkzStockzExchangezlistedzcompanyziszinvesting.zIfzanzinvestorzchooseztozletzazbrokerz ho
ldz thez sharesz andz justz sendz anz accountz statementz eachz month,z hisz orz herz investmentzisz protecte
dz againstz theft,z loss,z orz brokeragez firmz failurez byz thez Securitiesz InvestorzProtectionz Corpora
tionz (SIPC),z butz notz againstz az declinez inz value.z Dependingz onz thezparticularzstockzpurchased
zandzotherzholdings,zanzinvestorzmayzhavezplentyztozworryzabout.
Bothzsavingzandzinvestingzamountztozconsumptionzshiftingzthroughztime.zByznotzspendingzazdoll
arztoday,zazpersonziszableztozspendzmorezlately,zassumingzofzcourse,zthezpersonzsavedzorzinvestedz
wisely.
Investingziszriskyz butzsavingzisznot.
INVESTMENTz ALTERNATIVES:
Assets:
Assetsz arez thingsz thatz peoplez own.z Thez twoz kindsz ofz assetsz arez financialz assetsz andz realzass
ets.zThezdistinctionzbetweenztheseztermsziszeasiestztozseezfromzanzaccountingzviewpoint.
Azfinancialzassetzcarrieszazcorrespondingzliabilityzsomewhere.zIfzanzinvestorzbuyszshareszofzstoc
k,ztheyzarezanzassetztozthezinvestorzbutzshowzupzonzthezrightzsidezofzthezcorporation’szbalancezshee
t.zAzfinancialzasset,ztherefore,ziszonzthezleft-handzsidezofzthezowner’szbalancez sheetzandzthezright-
handzsidezofzthezissuer’szbalancezsheet.
(c)z Copyrightsz Virtualz Universityz ofz Pakistan 1
,Investmentz Analysisz &z Portfolioz Managementz (FIN630) VU
Az realz assetz doesz notz havez az correspondingz liabilityz associatedz withz it,z althoughz onez mightzb
ezcreatedztozfinancezthezrealzasset.
Financialzassetszhavezazcorrespondingzliabilityzbutzrealzassetszdoznot.
Securities:
Azsecurityziszazlegalzdocumentzthatzshowszanzownershipzinterest.zSecuritieszhavezhistoricallyzbee
nzassociatedzwithzfinancialzassetszsuchzaszstockszandzbonds,zbutzinzrecentzyearszhavezalsozbeenz us
edz withzrealzassets.zSecuritizationz isz thez processz ofzconvertingz anz assetz orz collectionzofzassetszi
ntozazmorezmarketablezforum.
Securityz Groupings:
Securitieszarezplacedzinzonezofzthreezcategories:zequityzsecurities,zfixedzincomezsecurities,zorzderi
vativezassets.
1) Equityz Securities:
Thez mostz importantz equityz securityz isz commonz stock.z Stockz representsz ownershipz interestz inza
z corporation.zEquityz securitiesz mayz payz dividendszfromzthez company’szearnings,z althoughzthez
companyzhasznozlegalzobligationztozdozso.zMostzcompanieszdozpayzdividends,zandzmostzcompani
esztryztozincreasezthesezdividendszonzazregularzbasis.
2) Fixedz Incomez Securities:
Azfixedzincomezsecurityzusuallyzprovideszazknownzcashzflowzwithznozgrowthzinzthezincomezstrea
m.z Bondsz arez thez mostz importantz fixedz incomez securities.z Az bondz isz az legalz obligationztozrep
ayz azloan’sz principalz andz interest,zbutz carriesz nozobligationz tozpayz morez thanz this.zInterestziszt
hezcostzofzborrowingzmoney.zAlthoughzaccountantszclassifyzpreferredzstockzaszanzequityz securit
y,z thez investmentz characteristicsz ofz preferredz stockz arez morez likez thosez ofz azfixedz incomez s
ecurity.z Mostz preferredz stocksz payz az fixedz annualz dividendz thatz doesz notzchangezovertimezc
onsequently.zAnzinvestmentzmanagerzwillzusuallyzlumpzpreferredzsharesz withzbondszratherzthanz
withzcommonzstocks.
Conversely,z az convertiblez bondz isz az debtz securityz payingz az fixedz interestz rate.z Itz hasz thezad
dedzfeaturezofzbeingzconvertiblezintozshareszofzcommonzstockszbyzthezbondzholders.zIfztheztermsz
ofzthezconversionzfeaturezareznotzparticularlyzattractivezatzazgivenzmoment,zthezbondszbehavezlike
zazbondzandzarezclassifiedzaszfixedzincomezsecurities.zOnzthezotherzhand,zrisingzstockzpriceszmake
zthezbondzactzmorezlikezthezunderlyingzstock,zinzwhichzcasezthezbondzmightzbezclassifiedzaszanzeq
uityzsecurity.
Thezpointziszthatzonezcannotzgeneralizezandzgroupzallzstockzissueszaszequityzsecuritieszandzallzbon
dszaszfixedzincomezsecurities.zTheirzinvestmentzcharacteristicszdeterminezhowztheyzareztreated.
Forzinvestmentzpurposes,z preferredz stockz isz consideredz az fixedz incomez security.
3) Derivativez Assets:
Derivativezassetszhavezreceivedzazgreatzdealzofzattentionzinzthez1990s.zAzderivativezassetziszproba
blyz impossiblez toz definez universally.z Inz general,z thez valuez ofz suchz anz assetz deriveszfromzthe
zvaluezofzsomez otherzassetzorzthezrelationshipzbetweenzseveralzotherzassets.
(c)z Copyrightsz Virtualz Universityz ofz Pakistan 2
,Investmentz Analysisz &z Portfolioz Managementz (FIN630) VU
Futurez andz optionsz contractsz arez thez mostz familiarz derivativez assets.z Thesez buildingz blockszo
fz riskz managementz programsz arez usedz byz allz largez investmentz housesz andz commercialzbank
s.
Thezthreezbroadzcategorieszofzsecuritieszarezequities,zfixedzincomezsecurities,zandzderivativez
asset.
THREEz REASONSz FORz INVESTING:
Peoplezchooseztozinvestztozsupplementztheirzincome,ztozearnzgains,zandztozexperiencezthezexcitem
entzofzthezinvestmentzprocess.
1) Income:
Somezpeoplezinvestzinzorderztozprovidezorzsupplementztheirzincome.zInvestmentszprovidezincome
zthroughzthezpaymentzofzdividendszorzinterest.
2) Appreciation:
Otherzindividuals,zespeciallyzthosezinztheirzpeakzworkingzyears,zmayzbezmorezinterestedzinzseein
gzthezvaluezofztheirzinvestmentszgrowzratherzthanzinzreceivingzanyzincomezfromzinvestment.zAppr
eciationziszanzincreasezinzthezvaluezofzanzinvestment.
3) Excitement:
Investingziszfrequentlyzsomeone’szhobby.zInvestingzisznotzinherentlyzanzendzinzitself;zitziszazmean
sztozanz end.zUltimately,zthezinvestmentzobjectivezinvolvesz improvedzfinancialzstanding.z Ifzanzac
tivezinvestorzmakeszfrequentztradeszbutzonlyzbreakszevenzinzthezprocess,zonlyzthezstockbrokerzwil
lzbenefitzmaterially.
Investingzisznotzanzendzinzitself;zitziszazmeansztozanzend.
THEz ACADEMICSz STUDYz OFz INVESTMENTS:
Somezthingszaboutzthezmarketszandzinvestorzbehaviorzarezclear.zManyzotherzthingszremainzazpuzz
le.z Onez objectivez ofz anyz investmentsz coursez shouldz bez toz distinguishz betweenz whatz wezdozan
dzdon’tzknow.zLet’szlookzbrieflyzatztheztwoztypeszofzmarketzresearchzinzwhichzbothzprofessorszan
dzWallzStreetzprofessionalszengage:ztheoreticalzandzempiricalzresearch.
Onezobjectivezofzanyzinvestmentzcoursezshouldzbeztozdistinguishzbetweenzwhatzwezdozandzdo
n’tzknow.
Theoreticalz Research:
Theoreticalzresearchzbuildszmathematicalzmodelszandzproposeszpricingzrelationshipszratherz thanz
studyingzactualzmarketzdata.zArbitrageziszthezpresencezofzazriskzlesszprofit.zMuchzofztheoreticalzre
searchziszthezstudyzofzarbitragezrelationships.
Similarly,zdividendszmustzbezpaidzfromzthezfirm’szcheckbook,zandzoncezthezcheckszarezsent,z thez
firmsztotalzassetszdecline.zWithzreducedzassets,zthezfirmziszworthzlesszandzthezstockzpricezdeclines
.zBothzthesezpointszcanzbezdemonstratedzwithztheoreticalzmodels,zbutzthatzdoesznotzmeanzpeoplez
willzbelievezthem.
Arbitrageziszazpresencezofzazriskzlesszprofit.
(c)z Copyrightsz Virtualz Universityz ofz Pakistan 3
, Investmentz Analysisz &z Portfolioz Managementz (FIN630) VU
Empiricalz Research:
Empiricalz researchz usesz actualz marketz dataz ratherz thanz mathematicalz models.z Financialztheo
ryzmightzsuggestzazrelationshipzthatzshouldzhold,zandzresearchzmightzthenzthezhypothesiszusingzre
alznumbers.zRelativelyzarbitraryzaccountingzdecisionszwithinzthezfirmszshouldznotz affectzthezvalu
ezofzthezfirm.zTheztheoreticalzunderpinningszofzfirmzvaluezshowzthatzifzmanagementzcouldzincrea
sezthezvaluezofzthezfirmzbyzazsimplezmanagementzactionzallzrationalzmanagementzteamszwouldzdo
zso.zAnzempiricalzresearchzprojectzmightzbeztozinvestigatezallz stockz splitsz overz thez pastz 60z mon
thsz andz seez ifz thez evidencez isz consistentz withz thez “nozchangezinzfirmzvalue”zthesis.
Thez financialz pressz isz particularlyz interestedz inz empiricalz research,z especiallyz researchzdeali
ngzwithzanomalies.zAnzanomalyziszanzobservedzresultzthatzdefieszexplanationzwithinzthezknownzt
heoreticalzframework
(c)z Copyrightsz Virtualz Universityz ofz Pakistan 4
Lessonz #z1
INTRODUCTIONz OFz INVESTMENT
Investmentziszaztopiczinzwhichzvirtuallyzeveryonezhaszsomeznativezinterest.zAtzazcollegezcampus,z
aznumberzofzstudentszfromzastronomyztozzoologyzseekztozgainzadmissionztozanz electivez investm
entsz classz inz thez Collegez ofz Businessz Administration.z Eveningz adultzeducationzclasseszwithzti
tleszsuchzasz“FundamentalszofzStockzMarket”zarezcommon.
Mostzreaderszofzthiszbookzarezenrolledzinzazcollege-
levelzinvestmentzcourse.zForzmanyz students,z thisz coursez willz bez thez onlyz timez theyz everz for
mallyz studyz investmentsz inz azclassroomz sitting.z Thez successz ofz anz individualz investmentz pr
ogramz hasz lifelongzramifications,zsozsoakingzupzaszmuchzofzthiszmaterialzaszpossiblezcanzbezadv
antageous.zAristotlezsaid,z“Thez educatedzdifferzfromzthezuneducatedz asz muchz asz thez livingzfro
mzthezdead”.zThiszideaziszespeciallyztruezwithzregardsztozinvestmentzeducation.
INVESTINGz DEFINED:
Anzeconomistzsayszwhenzpeoplezearnzazdollar;ztheyzdozonezofztwozthingszwithzit:ztheyzeitherzcons
umezitzorzsavezit.zAzpersonzconsumeszazdollarzbyzspendingzitzonzsomethingzlikezazcar,zclothing,z or
z food.z Peoplez alsoz consumez somez ofz theirz moneyz involuntarilyz becausez theyzmustzpayztax;za
zpersonzsaveszazdollarzbyzsomehowzputtingzitzasidezforzconsumptionzatzazlaterztime.
Azdistinctionzcanzbez madezbetweenzsavingzandzinvesting.zSavingzinvolveszputtingz moneyz away
z withz little,z ifz any,z riskz savingz dollars.z Puttingz moneyz inz az bankz certificatez ofz depositz orzazpassb
ookzaccountziszsaving.zAzsaverzknowszthezfuturezreturn,zandzthezaccountziszprobablyzinsuredzbyzth
ezFederalzdepositzInsurancezCorporationz(FDIC),zazgovernmentzagencyzthatzprotectszdepositorsza
gainstzbankzfailure.zInzthezshort-run,zsavingzinvolveszfewzworries.
Investingzalsozinvolveszputtingzmoneyzaway,zbutzinzazriskyzendeavor.zBuyingzshareszofzstockz inz
azNewzYorkzStockzExchangezlistedzcompanyziszinvesting.zIfzanzinvestorzchooseztozletzazbrokerz ho
ldz thez sharesz andz justz sendz anz accountz statementz eachz month,z hisz orz herz investmentzisz protecte
dz againstz theft,z loss,z orz brokeragez firmz failurez byz thez Securitiesz InvestorzProtectionz Corpora
tionz (SIPC),z butz notz againstz az declinez inz value.z Dependingz onz thezparticularzstockzpurchased
zandzotherzholdings,zanzinvestorzmayzhavezplentyztozworryzabout.
Bothzsavingzandzinvestingzamountztozconsumptionzshiftingzthroughztime.zByznotzspendingzazdoll
arztoday,zazpersonziszableztozspendzmorezlately,zassumingzofzcourse,zthezpersonzsavedzorzinvestedz
wisely.
Investingziszriskyz butzsavingzisznot.
INVESTMENTz ALTERNATIVES:
Assets:
Assetsz arez thingsz thatz peoplez own.z Thez twoz kindsz ofz assetsz arez financialz assetsz andz realzass
ets.zThezdistinctionzbetweenztheseztermsziszeasiestztozseezfromzanzaccountingzviewpoint.
Azfinancialzassetzcarrieszazcorrespondingzliabilityzsomewhere.zIfzanzinvestorzbuyszshareszofzstoc
k,ztheyzarezanzassetztozthezinvestorzbutzshowzupzonzthezrightzsidezofzthezcorporation’szbalancezshee
t.zAzfinancialzasset,ztherefore,ziszonzthezleft-handzsidezofzthezowner’szbalancez sheetzandzthezright-
handzsidezofzthezissuer’szbalancezsheet.
(c)z Copyrightsz Virtualz Universityz ofz Pakistan 1
,Investmentz Analysisz &z Portfolioz Managementz (FIN630) VU
Az realz assetz doesz notz havez az correspondingz liabilityz associatedz withz it,z althoughz onez mightzb
ezcreatedztozfinancezthezrealzasset.
Financialzassetszhavezazcorrespondingzliabilityzbutzrealzassetszdoznot.
Securities:
Azsecurityziszazlegalzdocumentzthatzshowszanzownershipzinterest.zSecuritieszhavezhistoricallyzbee
nzassociatedzwithzfinancialzassetszsuchzaszstockszandzbonds,zbutzinzrecentzyearszhavezalsozbeenz us
edz withzrealzassets.zSecuritizationz isz thez processz ofzconvertingz anz assetz orz collectionzofzassetszi
ntozazmorezmarketablezforum.
Securityz Groupings:
Securitieszarezplacedzinzonezofzthreezcategories:zequityzsecurities,zfixedzincomezsecurities,zorzderi
vativezassets.
1) Equityz Securities:
Thez mostz importantz equityz securityz isz commonz stock.z Stockz representsz ownershipz interestz inza
z corporation.zEquityz securitiesz mayz payz dividendszfromzthez company’szearnings,z althoughzthez
companyzhasznozlegalzobligationztozdozso.zMostzcompanieszdozpayzdividends,zandzmostzcompani
esztryztozincreasezthesezdividendszonzazregularzbasis.
2) Fixedz Incomez Securities:
Azfixedzincomezsecurityzusuallyzprovideszazknownzcashzflowzwithznozgrowthzinzthezincomezstrea
m.z Bondsz arez thez mostz importantz fixedz incomez securities.z Az bondz isz az legalz obligationztozrep
ayz azloan’sz principalz andz interest,zbutz carriesz nozobligationz tozpayz morez thanz this.zInterestziszt
hezcostzofzborrowingzmoney.zAlthoughzaccountantszclassifyzpreferredzstockzaszanzequityz securit
y,z thez investmentz characteristicsz ofz preferredz stockz arez morez likez thosez ofz azfixedz incomez s
ecurity.z Mostz preferredz stocksz payz az fixedz annualz dividendz thatz doesz notzchangezovertimezc
onsequently.zAnzinvestmentzmanagerzwillzusuallyzlumpzpreferredzsharesz withzbondszratherzthanz
withzcommonzstocks.
Conversely,z az convertiblez bondz isz az debtz securityz payingz az fixedz interestz rate.z Itz hasz thezad
dedzfeaturezofzbeingzconvertiblezintozshareszofzcommonzstockszbyzthezbondzholders.zIfztheztermsz
ofzthezconversionzfeaturezareznotzparticularlyzattractivezatzazgivenzmoment,zthezbondszbehavezlike
zazbondzandzarezclassifiedzaszfixedzincomezsecurities.zOnzthezotherzhand,zrisingzstockzpriceszmake
zthezbondzactzmorezlikezthezunderlyingzstock,zinzwhichzcasezthezbondzmightzbezclassifiedzaszanzeq
uityzsecurity.
Thezpointziszthatzonezcannotzgeneralizezandzgroupzallzstockzissueszaszequityzsecuritieszandzallzbon
dszaszfixedzincomezsecurities.zTheirzinvestmentzcharacteristicszdeterminezhowztheyzareztreated.
Forzinvestmentzpurposes,z preferredz stockz isz consideredz az fixedz incomez security.
3) Derivativez Assets:
Derivativezassetszhavezreceivedzazgreatzdealzofzattentionzinzthez1990s.zAzderivativezassetziszproba
blyz impossiblez toz definez universally.z Inz general,z thez valuez ofz suchz anz assetz deriveszfromzthe
zvaluezofzsomez otherzassetzorzthezrelationshipzbetweenzseveralzotherzassets.
(c)z Copyrightsz Virtualz Universityz ofz Pakistan 2
,Investmentz Analysisz &z Portfolioz Managementz (FIN630) VU
Futurez andz optionsz contractsz arez thez mostz familiarz derivativez assets.z Thesez buildingz blockszo
fz riskz managementz programsz arez usedz byz allz largez investmentz housesz andz commercialzbank
s.
Thezthreezbroadzcategorieszofzsecuritieszarezequities,zfixedzincomezsecurities,zandzderivativez
asset.
THREEz REASONSz FORz INVESTING:
Peoplezchooseztozinvestztozsupplementztheirzincome,ztozearnzgains,zandztozexperiencezthezexcitem
entzofzthezinvestmentzprocess.
1) Income:
Somezpeoplezinvestzinzorderztozprovidezorzsupplementztheirzincome.zInvestmentszprovidezincome
zthroughzthezpaymentzofzdividendszorzinterest.
2) Appreciation:
Otherzindividuals,zespeciallyzthosezinztheirzpeakzworkingzyears,zmayzbezmorezinterestedzinzseein
gzthezvaluezofztheirzinvestmentszgrowzratherzthanzinzreceivingzanyzincomezfromzinvestment.zAppr
eciationziszanzincreasezinzthezvaluezofzanzinvestment.
3) Excitement:
Investingziszfrequentlyzsomeone’szhobby.zInvestingzisznotzinherentlyzanzendzinzitself;zitziszazmean
sztozanz end.zUltimately,zthezinvestmentzobjectivezinvolvesz improvedzfinancialzstanding.z Ifzanzac
tivezinvestorzmakeszfrequentztradeszbutzonlyzbreakszevenzinzthezprocess,zonlyzthezstockbrokerzwil
lzbenefitzmaterially.
Investingzisznotzanzendzinzitself;zitziszazmeansztozanzend.
THEz ACADEMICSz STUDYz OFz INVESTMENTS:
Somezthingszaboutzthezmarketszandzinvestorzbehaviorzarezclear.zManyzotherzthingszremainzazpuzz
le.z Onez objectivez ofz anyz investmentsz coursez shouldz bez toz distinguishz betweenz whatz wezdozan
dzdon’tzknow.zLet’szlookzbrieflyzatztheztwoztypeszofzmarketzresearchzinzwhichzbothzprofessorszan
dzWallzStreetzprofessionalszengage:ztheoreticalzandzempiricalzresearch.
Onezobjectivezofzanyzinvestmentzcoursezshouldzbeztozdistinguishzbetweenzwhatzwezdozandzdo
n’tzknow.
Theoreticalz Research:
Theoreticalzresearchzbuildszmathematicalzmodelszandzproposeszpricingzrelationshipszratherz thanz
studyingzactualzmarketzdata.zArbitrageziszthezpresencezofzazriskzlesszprofit.zMuchzofztheoreticalzre
searchziszthezstudyzofzarbitragezrelationships.
Similarly,zdividendszmustzbezpaidzfromzthezfirm’szcheckbook,zandzoncezthezcheckszarezsent,z thez
firmsztotalzassetszdecline.zWithzreducedzassets,zthezfirmziszworthzlesszandzthezstockzpricezdeclines
.zBothzthesezpointszcanzbezdemonstratedzwithztheoreticalzmodels,zbutzthatzdoesznotzmeanzpeoplez
willzbelievezthem.
Arbitrageziszazpresencezofzazriskzlesszprofit.
(c)z Copyrightsz Virtualz Universityz ofz Pakistan 3
, Investmentz Analysisz &z Portfolioz Managementz (FIN630) VU
Empiricalz Research:
Empiricalz researchz usesz actualz marketz dataz ratherz thanz mathematicalz models.z Financialztheo
ryzmightzsuggestzazrelationshipzthatzshouldzhold,zandzresearchzmightzthenzthezhypothesiszusingzre
alznumbers.zRelativelyzarbitraryzaccountingzdecisionszwithinzthezfirmszshouldznotz affectzthezvalu
ezofzthezfirm.zTheztheoreticalzunderpinningszofzfirmzvaluezshowzthatzifzmanagementzcouldzincrea
sezthezvaluezofzthezfirmzbyzazsimplezmanagementzactionzallzrationalzmanagementzteamszwouldzdo
zso.zAnzempiricalzresearchzprojectzmightzbeztozinvestigatezallz stockz splitsz overz thez pastz 60z mon
thsz andz seez ifz thez evidencez isz consistentz withz thez “nozchangezinzfirmzvalue”zthesis.
Thez financialz pressz isz particularlyz interestedz inz empiricalz research,z especiallyz researchzdeali
ngzwithzanomalies.zAnzanomalyziszanzobservedzresultzthatzdefieszexplanationzwithinzthezknownzt
heoreticalzframework
(c)z Copyrightsz Virtualz Universityz ofz Pakistan 4
