Essentials of Investments: Chapter 7 - Capital Asset Pricing and Arbitrage Pricing Theory presents Capital Asset Pricing Model, Resulting Equilibrium Conditions, Capital Market Line, Slope and Market Risk Premium, Expected Return and Risk on Individual Securities.
Chapter 11, Arbitrage pricing theory and multifactor models of risk and return. In this chapter, we show how such no-arbitrage conditions together with the factor model introduced in Chapter 10 allow us to generalize the security market line of the CAPM to gain richer insight into the risk-return relationship.
(BQ) Part 1 book "Price theory & Applications" has contents: Supply, demand, and equilibrium; prices, costs, and the gains from trade; the behavior of consumers, consumers in the marketplace, the behavior of firms, production and costs,...and other contents.
(BQ) Part 2 book "Price theory & Applications" has contents: Market power, collusion, and oligopoly; the theory of games, external costs and benefits; common property and public goods; the demand for factors of production; the market for labor; allocating goods over time,...and other contents.
Bài giảng Chapter 5: Risk and return - Portfolio theory and asset pricing models presents of portfolio theory, capital asset pricing model (CAPM) (efficient frontier, capital market line (CML), security market line (SML), beta calculation, beta calculation), arbitrage pricing theory, fama french 3 factor model.
Price theory is made richer by the fact that each individual’s choices can affect the
opportunities available to others. If you decide to eat all of the cake, your roommate
cannot decide to eat some too. An equilibrium is an outcome in which each person’s
behavior is compatible with the restrictions imposed by everybody else’s behavior. In
many situations, it is possible to say both that there is only one possible equilibrium
and that there are good reasons to expect that equilibrium to actually come about. This
enables the economist to make predictions about the world....
Chapter 10 - Arbitrage pricing theory and multifactor models of risk and return. We begin by showing how the decomposition of risk into market versus firm-specific influences that we introduced in earlier cha pters can be extended to deal with the multifaceted nature of systematic risk. Multifactor models of security returns can be used to measure and manage exposure to each of many economy-wide factors such as business-cycle risk, interest or inflation rate risk, energy price risk, and so on.
Asset pricing theory tries to understand the prices or values of claims to uncertain payments.
A low price implies a high rate of return, so one can also think of the theory as explaining
why some assets pay higher average returns than others.
To value an asset, we have to account for the delay and for the risk of its payments. The
effects of time are not too difficult to work out. However, corrections for risk are much
more important determinants of an many assets’ values. For example, over the last 50 years
U.S. stocks have given a real return of about 9% on average. Of...
In a world where ownership is divorced from control, characterised by economic and geo-political uncertainty, our companion text Portfolio Theory and Financial Analyses (PTFA henceforth) began with the following question. We then observed that if investors are rational and capital markets are efficient with a large number of constituents,economic variables (such as share prices and returns) should be random, which simplifies matters.
Asset prices are determined by investors’ risk preferences and by the distributions
of assets’ risky future payments. Economists refer to these two bases
of prices as investor "tastes" and the economy’s "technologies" for generating
asset returns. A satisfactory theory of asset valuation must consider how individuals
allocate their wealth among assets having different future payments.
This chapter explores the development of expected utility theory, the standard
approach for modeling investor choices over risky assets....
During the past 25 years of digital information development, industry-wide discussion has progressed from resolving technology issues for managing GI to establishing policy for accessing it, especially in the public sector. Geographic Information: Value, Pricing, Production and Consumption brings the producer and consumer arguments together, providing a fresh perspective on the emotional and territorial issues of IPR (intellectual property rights) protection and liberation.
Once a company issues shares (common stock) and receives the proceeds, it has no direct involvement with their subsequent transactions on the capital market, or the price at which they are traded. These are matters for negotiation between existing shareholders and prospective investors, based on their own financial agenda.
We wrote the first edition of this textbook more than ten years ago. The intervening years
have been a period of rapid and profound change in the investments industry. This is due in
part to an abundance of newly designed securities, in part to the creation of new trading
strategies that would have been impossible without concurrent advances in computer technology,
and in part to rapid advances in the theory of investments that have come out of the
The 2007 global financial crisis ignited by reckless bankers and their flawed reward structures will be felt for years to come.
Emerging from the wreckage, however, is renewed support for the over-arching objective of traditional finance theory,
namely the long-run maximisation of shareholder wealth using the current market value of ordinary shares (common
stock) as a benchmark.
(BQ) Part 2 book "Theory and problems of managerial accounting" has contents: Standard costs; responsibility accounting and cost allocation; performance evaluation; transfer pricing and decentralization; capital budgeting; quantitative approaches to managerial accounting; financial statement analysis and statement of changes in financial position;..and other contents.
(BQ) Part 2 book "Managerial economics - Theory and practice" has contents: Market structure - Perfect competition and monopoly; market structure - monopolistic competition; market structure - duopoly and oligopoly, pricing practices, capital budgeting, introduction to game theory; market failure and government intervention,...and other contents.
This chapter examines pricing decision in an international context.The chapter begins with a discussion of the role of price in general. It proceeds to cover the various factors that can affect price, with special attention given to certain variables that are unique to the international market (e.g., foreign exchange rate, dumping, price control).
A section of this chapter is devoted to the examination of countertrade as an alternative method of trading. The various types of countertrade are discussed. Another section of this chapter deals with pricing terms used in international quotations. To be competitive, it is the job of a responsible exporter to provide a quotation that is complete and meaningful.
The discipline of economics has developed principles, theories, and
models that isolate the most important determinants of economic events.
In constructing a model, economists make assumptions to eliminate unnecessary
detail to reduce the complexity of economic behavior. Once
modeled, economic behavior may be presented as a relationship between
dependent and independent variables. The behavior being explained is
the dependent variable; the economic events explaining that behavior are
the independent variables.