Which of the Following Factors Does Not Affect the Initial

question 87

Multiple Choice

Which of the following factors does not affect the initial market price of a share?

• A)the company's anticipated future net income
• B)the legal value of the share
• C)the current state of the economy
• D)the expected dividend rate per share

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Definitions:

Premium/Discount

Refers to the amount by which the market price of a bond exceeds (premium) or is less than (discount) its face value.

Front-end Load

A sales charge or commission paid by an investor at the initial purchase of mutual fund shares, usually used to compensate brokers or sales agents.

NAV

Net Asset Value, the total value of a fund's assets minus its liabilities, divided by the number of shares outstanding.

Portfolio Turnover

A measure of how frequently assets within a portfolio are bought and sold by the manager over a specific period.