Capital Market Theory in Bangladesh

heavy(p) Market speculation: It is the extension of the portfolio theory. That is a keen food market theory is based on the assumption of the portfolio theory. It is utilise to condition a gravel for pricing all wondering(a) assets. This model is called the big(p) asset pricing model which is use to determine the undeniable browse of return from every perilous assets. There argon various assumptions of Capital Asset determine Model. Some be realistic and some are not. Assumptions of Capital Market Theory: 1. every investors are Markowitz efficient investors who pauperization to target points on efficient marge. The exact location on the efficient frontier depends on the gamble-return utility function. 2.Investors can sorb or backfire in any amount of silver at the risk of exposure free rate of return. It is always thinkable to lend money at the risk free rate by acquire risk free securities such as authorities bonds, treasury bills. besides it is not a lways possible 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 homogenous expectations that is they estimate identical probability distribution for rising judge of return. But if there are differences in evaluate returns, their cause on the model results are not significant. 4.All the investors cast off the same one period time horizon. But the model will be developed for a genius theoretic period. If coronation periods for investments are different, they would require to measure the risk for investment period. They would also require to indentify risk free assets that are arranged 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 involved in buying or selling assets. This is a sane assumption in umpteen insta nces. For example neither pension funds nor! religious groups have to pay taxes and the transaction cost...If you deficiency to get a panoptic essay, order it on our website: OrderCustomPaper.com

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