Capital Asset Pricing Model & Modern Portfolio theory
What are the difference between Capital Asset Pricing Model and Markowitz’s Modern Portfolio Theory?
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Capital Asset Pricing Model concurrently simplified Markowitz’s Modern Portfolio Theory (MPT), made this more practical and introduced the concept of specific and systematic risk. While MPT has arbitrary correlation among all investments, CAPM, in its fundamental form, only links investments via the market as a complete.
Discuss risk from the perspective of the CAPM (Capital Asset Pricing Model).
From books of Aggarwal Bors, following information has been extracted: Rs. Sales 2,40,000 Variable costs 1,44,000 Fixed costs 26,000 Profit before tax 70,000 Rate of tax
Is the Black–Scholes formula correct?
How is gamma measure the rehedged position?
Describe the three career opportunities in the field of finance.
Explain the cash budget and the capital budget relation to pro forma financial statements.
Unfocused Books is a discount retail bookshop that has three departments: fiction, non-fiction and children’s books. Sales and cost of sales for each department are shown below. In addition, each department has its own fixed costs for staffing and takes a one-third share of rental and management cos
Explain the concept of the risk–return relationship.
A stock whose value is now $44.75 is growing on average by 15 percent per annum. Its volatility is 22 percent. The interest rate is 4 percent. You need to value a call option along with a strike of $45, expiring in two months’ time. So, what can you do?
Explain the term implied volatility in Black–Scholes option-pricing equation.
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