What is meant by a perfect capital market? If a capital market has the following characteristics then it would be considered as a perfect capital market. In perfect capital market case, assuming complete markets, perfect rationality of agents Continue Reading
Standard Deviation is Better Measurement
Why is standard deviation better measurement for risk? In finance, the standard deviation is applied to the annual rate of return of an investment to measure the investment’s volatility. Standard deviation is also known as historical volatility and Continue Reading
Asymmetric Information
In financial market what is meant by asymmetric information? When a manager knows more about his or her firm’s future than do the analysts and investors who follow the company then a situation of asymmetric information exists. In Continue Reading
Individual Investor Life Cycle
Individual Investor Life Cycle Individual investor life cycle indicates the investment behavior of investors over the different ages of their life. The investment decision is based on the age, financial condition, future plans, and risk characteristics of an Continue Reading
The Portfolio Management Process
The Portfolio Management Process Before discussing the portfolio management process lets have some idea of a portfolio, basically, portfolio management process is the set of securities or combination of investment securities. The process of managing a group of Continue Reading
Will Profit Maximization Always Result in Stock Price Maximization
Will Profit Maximization Always Result in Stock Price Maximization Some people may ask will profit maximization always result in stock price maximization? Profit maximization does not always result in stock price maximization, because profit maximization can only ensure Continue Reading