Question

A common set of factors that affect equity returns include:

Answer 1

Equity Returns are affected by many Micro and Macro Economic Factors(Interest Rates, Employment Rates, Commodity Prices, Global Economies, Spending Capacity of Consumers, etc., ).

Theses can be broadly defined as:

1. Macroeconomic variables that influence the overall economic environment in which the firm issuing the security conducts its business.

2. Exchange rate changes between the currency of the country issuing the stock and the currency of other countries where suppliers, customers, and investors of the firm reside..

3. The industrial structure of the country in which the firm operates.