Analysis of Casual Relationship between key Financial Variables: Evidence on Companies Listed in Tehran Stock Exchange

摘要

Background: Investors search for profitable investment opportunities with respect tothe risk in financial markets. Since investors are willing to sell stocks whenever theywant; they invest in liquid stocks with low liquidity risk. The free float is an importantcriterion that can show liquidity of a single stock. The higher the stock free float, thelower liquidity risk. There is a common sense that the higher the stock free float, thehigher the transaction volume and so the higher the risk and also the higher theexpected return. Objectives: This paper investigates the relationship between risk,return, liquidity and free float of shares in the companies listed in Tehran stockexchange. In this regard, the research hypnosis's was developed to purpose that there isa significant relationship between risk, return and liquidity with float of shares in thecompanies listed in Tehran stock exchange. For this purpose the statically society wasall firms in Tehran Stock Exchange and the financial information was gathered with useof their financial reports from 2007 and ending to 2013. Results The researchhypothesis was examined using SPSS and E-Views as well as t-test. The results showthat, there is a significant relationship between risk, return and liquidity with free floatof shares.