Let’s face it, price is a determining factor for most goods purchased. Therefore, price acts as a measure of quality. Generally, the higher the price the greater the quality perceived. But how do we determine the price of goods that we purchase?
These questions can be extended to the prices of stock exchange-listed shares.
I have decided to narrow my thoughts on, how shares are priced. We all know that the price displayed on each listed stock includes all the known information about the share. Any information that is unknown is considered as an immeasurable risk. Immeasurable risk if deemed material, has the propensity to either move the share price up or down unrealistically.