Question

Explain following statements / reasons: Price rise is an outcome of multi-factors.​

Answer 1

multi-factor model is a financial model that employs multiple factors in its calculations to explain market phenomena and/or equilibrium asset prices. A multi-factor model can be used to explain either an individual security or a portfolio of securities. It does so by comparing two or more factors to analyze relationships between variables and the resulting performance. Multi-factor models also help explain the weight of the different factors used in the models, indicating which factor has more of an impact on the price of an asset.

Factors are compared using the following formula:

Ri = ai + _i(m) * Rm + _i(1) * F1 + _i(2) * F2 +...+_i(N) * FN + ei

Ri is the return of security

Rm is the market return

F(1, 2, 3 ... N) is each of the factors used

_ is the beta with respect to each factor including the market (m)

e is the error term

a is the intercept
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Answer 2

Answer:

Explanation:

True

1. Rise in price depends upon multiple factors
2. Price can be risen due to down in share market
3. It can also be due to increase in currency rate of foreign countries
4. So, the price of Gold , Silver and currency rate  are changed on daily basis
5. Sometimes these rate are reasonable and sometimes they are too high
6. So it is said that price depends on multiple factors

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