Home > Blossary: Capital Market Theory
Capital market theory makes an attempt to explain and forecast how a capital market will behave in the future and this can be done by analyzing the behavior of securities.

Category: Business

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Created by: SingleWriter

Number of Blossarys: 3

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Dollar return is a sum of return that investors gets from dividends and from capital gain which is influenced by the change in market value of an asset or an investment. It is calculated by taking a ...

Domain: Financial services; Category: Finance

This is the return that an investor gets after holding his investment for a certain number of years, let's say 'n' years. Each year's return is calculated separately and then summed up together to ...

Domain: Financial services; Category: Finance

Average return basically tells how much an investor has earned on his investment on average in a certain year over a certain period. It is calculated by dividing total return on investment by the ...

Domain: Financial services; Category: Finance

Standard deviation is a tool that is used to determine how volatile an investment is. Some analysts also call it historical volatility since it predicts future volatility by looking at historical ...

Domain: Financial services; Category: Finance

When standard deviation is squared, it gives the figure of variance. Variance of return can calculated by determining probability-weighted average of squared deviations from the expected value. It is ...

Domain: Financial services; Category: Finance

Risk premium is basically the excess that an investor earns over the risk free rate by investing in a risky asset or stock. It is considered as a reward for the investor who is willing to take a ...

Domain: Financial services; Category: Finance

Risk cannot really be defined by a fixed definition or formula but one can certainly calculate it to get a good idea about its implications. One way to do it is by calculating the standard deviation ...

Domain: Financial services; Category: Finance

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