Saturday, July 16, 2011

How would an increase in inflation affect the purchase price of a share?

Inflation causes the country's competitiveness to decline. It will affect the revenue of the companies doing export business.The price per share will decline.The P/E ration is likely to be lower during recession,but higher during the boom.In fact the increase in policy rate will have less affects on the share price,because it is in the booming period.

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