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Mutual fund theorem |
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Mutual fund theoremA result associated with the CAPM, asserting that investors will choose to invest their entire risky portfolio in a market-index or mutual fund.Mutual fund theorem Similar MatchesRybczynski TheoremRybczynski TheoremThe property of the Heckscher-Ohlin Model that, at constant prices, an increase in the endowment of one factor increases the output of the industry that uses that factor intensively and reduces the output of the other (or some other) industry. Due to Rybczynski (1955). First theorem of welfare economicsFirst theorem of welfare economicsThe proposition of welfare economics that a competitive general equilibrium is Pareto optimal. A corollary is that free trade is Pareto optimal among countries. Gains from trade theoremGains from trade theoremThe theoretical proposition that (in the absence of distortions) there will be gains from trade for any economy that moves from autarky to free trade, as well as for a small open economy and for the world as a whole if tariffs are reduced appropriately. Due to Samuelson (1939, 1962). Central Limit TheoremCentral Limit TheoremThe Law of Large Numbers states that as a sample of independent, identically distributed random numbers approaches infinity, its probability density function approaches the normal distribution. See: Normal Distribution. Two fund separation theoremTwo fund separation theoremThe theoretical result that all investors will hold a combination of the risk-free asset and the market portfolio. Further SuggestionsSeparation theoremHeckscher-Ohlin Theorem Kemp-Wan Theorem Lerner Symmetry Theorem Second theorem of welfare economics Spot futures parity theorem Coase Theorem Interest rate parity theorem Factor Price Equalization Theorem Stolper-Samuelson Theorem Heckscher-Ohlin-Vanek Theorem |
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