Capital Market Theory in Bangladesh

heavy(p) Market hypothesis: It is the extension of the portfolio theory. That is a keen commercialise theory is based on the assumption of the portfolio theory. It is utilise to fall in a pretense for pricing all wondering(a) assets. This model is called the detonator asset pricing model which is use to determine the involve regulate of return from every perilous assets. There argon various assumptions of Capital Asset determine Model. Some ar realistic and some are not. Assumptions of Capital Market Theory: 1. every investors are Markowitz efficient investors who pauperization to target points on efficient edge. The exact location on the efficient frontier depends on the gamble-return utility function. 2.Investors can sorb or drop out in any amount of property at the try free rate of return. It is always executable to lend money at the risk free rate by get risk free securities such as authorities bonds, exchequer bills. besides it is not always possib le to usurp at the risk free rate. However, a higher acquire rate does not affect much the results of the model. 3.All the investors pass water solid expectations that is they estimate identical probability distribution for rising evaluate of return. But if there are differences in evaluate returns, their effects on the model results are not significant. 4.

All the investors ride the same one period time horizon. But the model will be developed for a genius divinatory period. If enthronement periods for investments are different, they would require to measure the risk for investment period. They would also requir e to indentify risk free assets that are se! lf-consistent with the risk free period. 5.All investments are incessantly divisible, which means that it is possible to buy or sell any fractional shares of assets or portfolio assets. 6.There are no taxes or transaction costs problematic in buying or selling assets. This is a apt assumption in umpteen instances. For example neither reward funds nor religious groups have to pay taxes and the transaction cost...If you pauperism to get a panoptic essay, order it on our website: OrderCustomPaper.com

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