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Unit-1 Portfolio and Capital Market Theory - Coggle Diagram
Unit-1
Portfolio and Capital Market Theory
Capital Markets and Informational Efficiency
Capital Definition
Capital Market Vs Money Market
Perfect capital market Features
Frictionless
Perfect Competition
Rational Participants
Informational Efficiency
Informational Efficiency
Definition
Weak-Form informational efficiency
Semi- Strong informational efficiency
Strong informational Efficiency
Portfolio Theory
Risk-return Ratio
Creating Investment Portfolio
Markowitz Diversification Strategy
Central Questions Addressed
CAPM
Developement form Portfolio Theory
Application Field: Evaluation & Company Valuation
Central Assumptions
Single Period Transaction Horizon
Risk-avrese. utility- maximizing investors
Price Takers
Homogenious Expectations
Risk-free investment exists
Perfect Capital market Exists
Beta as a Measure of Risk
Definition Level of Risk premium
Calculation Regression Analysis
Estimation problem: uses ex post values
Security Market Line (SML)
Study Goals
what a perfect capital market is.
which forms of informational efficiency exist.
how returns and risks interrelate and how this
applies to portfolio theory.
what CAPM is and what the central assumptions of this model are.