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Capital asset pricing model |
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Capital asset pricing modelA model for generating expected equity returns. It is based on the premise that returns are the reward for taking on risk, and that risk can be split into two types: stock-specific risk and market risk.Since stock-specific risk can be mitigated by diversification policies, investors should not be compensated for taking this on. Expected returns should only be a function of the share's response to returns on the market as a whole, which is given by the share's beta.Similar MatchesArbitrage free option pricing modelsArbitrage free option pricing modelsYield curve option-pricing models. Transfer pricingTransfer pricingLiterally this only refers to the price charged on goods and services that are traded between subsidiaries of a multinational corporation. However, the term usually connotes the setting of such prices high or low so as to minimize the total taxes paid to different governments, in response to differences in corporate tax rates. RepricingRepricingTo change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. Garman Kohlhagen option pricing modelGarman Kohlhagen option pricing modelA model widely used to price foreign currency options. Pricing efficiencyPricing efficiencyAlso called external efficiency; a market characteristic that prices at all times fully reflect all available information that is relevant to the valuation of securities. Further SuggestionsIndication pricing schedulePricing to market Administrative pricing rules Asset pricing model Two state option pricing model Forward pricing forward pricing Binomial option pricing model Capital asset pricing model (CAPM) International Asset Pricing Model (IAPM) Underpricing Regulatory pricing risk Option Pricing Curve |
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