(97)---IMPLICATIONS AND RELEVANCE OF CAPITAL ASSET PRICING MODEL

Implications and Relevance of Capital Asset Pricing Model Capital asset pricing model (CAPM) based on a number of assumptions. Given th...

(96)---PORTFOLIO THEORY AND ASSET PRICING MODELS

Portfolio Theory and Asset Pricing Models The portfolio is a bundle or a combination of individual asset or securities. The portfolio pr...

(95)---NORMAL DISTRIBUTION AND STANDARD DEVIATION

Normal Distribution and Standard Deviation The normal distribution is a smooth, symmetric, continuous, bell shaped curve as shown. The ...

(94)---EXPECTED RETURN AND RISK

Expected Return and Risk Instead of using historical data for calculating return and risk, we may use forecast ed data. Suppose you ar...

(93)---HISTORICAL CAPITAL MARKET RETURNS

Historical Capital Market Returns What rates of returns on shares and other financial instructions have investors earned? You can use i...

(92)---RISK OF RATES OF RETURN

Risk of Rates of Return The variability of rates of return may be defined as the extent of the deviations or dispersion of individual r...

Risk and Return in Finance: Measures, Relationship and Examples

Return is the reward from an investment, while risk is the uncertainty surrounding that return. Finance decisions compare expected return wi...

(90)---EQUITY CAPITALIZATION RATE

Equity Capitalization Rate In our previous posts we discussed how the present value of a share can be calculated, after that we must kn...

(89)---VALUATION OF ORDINARY SHARES

Valuation of Ordinary Shares Valuation of ordinary shares is relatively more difficult, because The rate of dividend on ordinary shar...