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Theory of second best |
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Theory of second bestSee second best.Similar MatchesPreferred habitat theoryPreferred habitat theoryA biased expectations theory that believes the term structure reflects the expectation of the future path of interest rates as well as risk premium. The theory rejects the assertion that the risk premium must rise uniformly with maturity, but instead profits that to the extent that the demand for and supply of funds do not match for a given maturity range, some participants will shift to maturities showing the opposite imbalances, as long as they are compensated by an appropriate risk premium whose magnitude will reflect the extent of aversion to either price or reinvestment risk. Agency theoryAgency theoryThe analysis of principal-agent relationships, in which one person, an agent, acts on behalf of another person, a principal. Purchasing power parity theoryPurchasing power parity theoryA theory of the exchange rate that the rate will adjust to achieve purchasing power parity, in either its absolute or its relative form. Dow dividend theoryDow dividend theorySee: Dogs of the Dow. Complexity TheoryComplexity TheoryThe theory that processes with a large number of seemingly independent agents can spontaneously organize themselves into a coherent system. Further SuggestionsElliott Wave TheoryGame Theory Short interest theory Greater fool theory Cushion theory Game theory Local expectations theory Bubble theory efficient market theory Dow Theory Odd lot theory Labor theory of value Modern portfolio theory Bicycle Theory capital market theory Dependency Theory Dow theory Normal backwardation theory Portfolio theory Expectations theory of forward exchange rates Efficient markets theory(EMT) Presidential election cycle theory Conduit theory Trade theory Product cycle theory |
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