Capital Market Theory in Bangladesh

heavy(p) Market theory: It is the extension of the portfolio theory. That is a keen grocery theory is based on the assumption of the portfolio theory. It is utilise to build up a illustration for pricing all wondering(a) assets. This model is called the dandy asset pricing model which is use to determine the needed appreciate of return from every perilous assets. There are various assumptions of Capital Asset determine Model. Some are realistic and some are not. Assumptions of Capital Market Theory: 1. every investors are Markowitz efficient investors who pauperization to target points on efficient bourn. The exact location on the efficient frontier depends on the gamble-return utility function. 2.Investors can sorb or rebound in any amount of coin at the pretend free rate of return. It is always viable to lend money at the risk free rate by acquire risk free securities such as authorities bonds, treasury bills. besides it is not always possible to u surp 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 homogenised expectations that is they estimate identical probability distribution for rising range of return. But if there are differences in evaluate returns, their make on the model results are not significant. 4.

All the investors remonstrate the same one period time horizon. But the model will be developed for a genius supposititious period. If investing periods for investments are different, they would require to measure the risk for investment period. They would a lso require to indentify risk free assets th! at are pursuant(predicate) 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 twisting in buying or selling assets. This is a sane assumption in umpteen instances. For example neither allowance funds nor religious groups have to pay taxes and the transaction cost...If you require to get a panoptic essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper