Archive | Portfolio Management

Modern Portfolio Theory: Basis and Strategies | Financial Economics

In this article we will discuss about:- 1. Meaning of Modern Portfolio Theory (MPT) 2. Basis of Modern Portfolio Theory (MPT) 3. Strategies 4. Mathematical Models. Meaning of Modern Portfolio Theory (MPT): MPT Postulates those savers are generally risk averse and try to reduce risk by all possible methods. The markets are perfect and absorb all information perfectly and returns [...]

By |2017-12-15T11:15:53+05:30December 15, 2017|Theories|Comments Off on Modern Portfolio Theory: Basis and Strategies | Financial Economics

Arbitrage Pricing Theory of Portfolio Management | Financial Economics

Capital Assets Pricing Model (CAPM), referred to Arbitrage Pricing Theory (APT) is an equilibrium model of asset pricing but assumes that the returns are generated by a factor model. Its assumption vis-a-vis those of CAPM are set out first: APT: i. Investors do not look at expected returns and standard deviations. ii. Risk Return Analysis is not the basis. Investors [...]

By |2017-12-15T11:15:53+05:30December 15, 2017|Theories|Comments Off on Arbitrage Pricing Theory of Portfolio Management | Financial Economics

Random Walk Hypothesis: Assumptions and Tests | Financial Economics

In this article we will discuss about:- 1. Introduction to Random Walk Hypothesis 2. Random Walk Assumptions 3. Schematic Presentation 4. Test 5. Essence 6. Limitations. Introduction to Random Walk Hypothesis: There are theoretically three approaches to market valuation, namely, efficient market hypothesis, fundamental analysis and technical analysis. Under fundamental analysis, the share value depends on the intrinsic worth of [...]

By |2017-12-15T11:15:53+05:30December 15, 2017|Theories|Comments Off on Random Walk Hypothesis: Assumptions and Tests | Financial Economics
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