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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 MatchesInternational Asset Pricing Model (IAPM)International Asset Pricing Model (IAPM)The international version of the CAPM assuming that investors in each country share the same consumption basket and purchasing power parity holds. Indication pricing scheduleIndication pricing scheduleA statement of rates for an interest rate or currency swap. Asset pricing modelAsset pricing modelA model for determining the required or expected rate of return on an asset. Related: Capital asset pricing model and arbitrage pricing theory. UnderpricingUnderpricingIssuing securities at less than their market value. Pricing to marketPricing to marketThe practice of an exporting firm holding fixed (or not fully adjusting) the price it charges in the export market when its costs or exchange rate change. See pass-through. Seminal treatment was Krugman (1987). Further SuggestionsRepricingforward pricing Capital asset pricing model (CAPM) Binomial option pricing model Arbitrage free option pricing models Transfer pricing Pricing efficiency Forward pricing Garman Kohlhagen option pricing model Two state option pricing model Regulatory pricing risk Administrative pricing rules Option Pricing Curve |
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