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Homogeneous expectations assumption |
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Homogeneous expectations assumptionAn assumption of Markowitz portfolio construction that investors have the same expectations with respect to the inputs that are used to derive efficient portfolios: asset returns, variances, and covariances.Homogeneous expectations assumption Similar MatchesUnbiased expectations hypothesisUnbiased expectations hypothesisTheory that forward exchange rates are unbiased predictors of future spot rates. See Forward parity. Local expectations hypothesis (LEH)Local expectations hypothesis (LEH)Theory that bonds similar in all aspects except maturity will have the same holding-period rate of return. Local expectations theoryLocal expectations theoryA form of the pure expectations theory that suggests that the returns on bonds of different maturities will be the same over a short-term investment horizon. Return to maturity expectationsReturn to maturity expectationsA variant of pure expectations theory that suggests that the return an investor will realize by rolling over short-term bonds to some investment horizon will be the same as holding a zero-coupon bond with a maturity that is the same as that investment horizon. Rational expectationsRational expectationsThe idea that people rationally anticipate the future and respond today to what they see ahead. This concept was pioneered by Nobel Laureate, Robert E. Lucas, Jr. Further SuggestionsExpectations theory of forward exchange ratesExpectations hypothesis theories |
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