Homogeneous expectations assumption


 

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Homogeneous expectations assumption

An 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 Matches

Unbiased expectations hypothesis

Unbiased expectations hypothesis

Theory 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 theory

Local expectations theory

A 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 expectations

Return to maturity expectations

A 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 expectations

Rational expectations

The 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 Suggestions

Expectations theory of forward exchange rates
Expectations hypothesis theories


 
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