An Overview of Asset Pricing Models

Business & Finance, Finance & Investing, Banks & Banking
Cover of the book An Overview of Asset Pricing Models by Mohamed Ismail Mohamed Riyath, GRIN Verlag
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Author: Mohamed Ismail Mohamed Riyath ISBN: 9783668093300
Publisher: GRIN Verlag Publication: June 22, 2018
Imprint: GRIN Verlag Language: English
Author: Mohamed Ismail Mohamed Riyath
ISBN: 9783668093300
Publisher: GRIN Verlag
Publication: June 22, 2018
Imprint: GRIN Verlag
Language: English

Research Paper (postgraduate) from the year 2015 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, , course: Higher National Diploma in Accountancy (HNDA), language: English, abstract: The term financial market describes any marketplace where lenders, i.e. those who have excess fund, and borrowers, i.e. those who need funds, meet together for an exchange of instruments such as equities, bonds, currencies and derivatives. The lenders in the financial market are called investors who buy financial instruments. The investors invest their fund to maximize their wealth. In reality investors are unable to achieve their objectives at all due to poor performance of respective stock and the market conditions when they are investing in equities. The reason could be the assets may underpriced or overpriced when making investment decisions. If the investors are priced correctly for the asset by considering all relevant factors which are affecting the value, they can enjoy normal profit by appropriately pricing the asset in an efficient market. It has always been the challenge of explaining the decision process of the investors in the stock market. In this context, the behavior of investor has a close relationship with the investment decisions and the way of enriching. The rate of return and its determinations are the major issues in Finance. The rate of return is one of fundamental criteria for allocation of resources and analysis of risk and return. Their importance can be observed in the field of corporate and personal finance when define the viability of an investment and making investment decisions. Stock returns is always be considered as the principal point when investors going to put their money in financial market. More profit have been involved in higher risk, and vice versa. Investors should take into account their decision to invest their money in accordance with their risk-taking abilities. Many theories and models have developed to guide investors in measuring their proper risk for a given level of return, which will help investors to take a decision easier. All such theories and models unable practiced in all times in different markets. Anomalies could occur in all different conditions of the market (Ramdy 2011).

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Research Paper (postgraduate) from the year 2015 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, , course: Higher National Diploma in Accountancy (HNDA), language: English, abstract: The term financial market describes any marketplace where lenders, i.e. those who have excess fund, and borrowers, i.e. those who need funds, meet together for an exchange of instruments such as equities, bonds, currencies and derivatives. The lenders in the financial market are called investors who buy financial instruments. The investors invest their fund to maximize their wealth. In reality investors are unable to achieve their objectives at all due to poor performance of respective stock and the market conditions when they are investing in equities. The reason could be the assets may underpriced or overpriced when making investment decisions. If the investors are priced correctly for the asset by considering all relevant factors which are affecting the value, they can enjoy normal profit by appropriately pricing the asset in an efficient market. It has always been the challenge of explaining the decision process of the investors in the stock market. In this context, the behavior of investor has a close relationship with the investment decisions and the way of enriching. The rate of return and its determinations are the major issues in Finance. The rate of return is one of fundamental criteria for allocation of resources and analysis of risk and return. Their importance can be observed in the field of corporate and personal finance when define the viability of an investment and making investment decisions. Stock returns is always be considered as the principal point when investors going to put their money in financial market. More profit have been involved in higher risk, and vice versa. Investors should take into account their decision to invest their money in accordance with their risk-taking abilities. Many theories and models have developed to guide investors in measuring their proper risk for a given level of return, which will help investors to take a decision easier. All such theories and models unable practiced in all times in different markets. Anomalies could occur in all different conditions of the market (Ramdy 2011).

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