Capital market theory

 

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Capital market theory

The generic term for models which aim to price assets, usually shares or baskets of them, in terms of the trade-off between risk and return that investors seek.The best known and most influential of these is the Capital Asset Pricing Model.



Similar Matches

Capital asset pricing model (CAPM)

Capital asset pricing model (CAPM)

An economic theory that describes the relationship between risk and expected return, and serves as a model for the pricing of risky securities. The CAPM asserts that the only risk that is priced by rational investors is systematic risk, because that risk cannot be eliminated by diversification. The CAPM says that the expected return of a security or a portfolio is equal to the rate on a risk-free security plus a risk premium multiplied by the assets systematic risk. Theory was invented by William Sharpe (1964) and John Lintner (1965).


Small capitalization (small cap) fund

Small capitalization (small cap) fund

A mutual fund that invests primarily in mutual fund of companies whose market value is less than $1 billion. Small-cap stocks historically have been more volatile than large-cap stocks, and often perform differently from the overall market.


Capital inflow

Capital inflow

A net flow of capital, real and/or financial, into a country, in the form of increased purchases of domestic assets by foreigners and/or reduced holdings of foreign assets by domestic residents. Recorded as positive, or a credit, in the balance on capital account.


Efficient capital market

Efficient capital market

A market in which new information is very quickly reflected accurately in share prices.


Issued share capital

Issued share capital

The amount of authorised share capital that shareholders have actually subscribed to a company for share ownership.


Further Suggestions

Capital mobility
Core capital
Morgan Stanley Capital International World Index
Capitalized
Capitalist
split capital investment trust
Short term capital gain
Cost of limited partner capital
Incremental cost of capital
Negative working capital
Pecking order view (of capital structure)
Working capital management
Other capital
Capital
Capital asset
capital movement
Long term capital gain
Capital good
Working capital ratio
Capital gains tax
working capital
Portfolio capital
capital asset pricing model
Issued share capital
Short-term capital flow


 
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