Capital Market Theory in Bangladesh

heavy(p) Market possibleness: It is the source of the portfolio theory. That is a keen food market theory is based on the effrontery of the portfolio theory. It is utilise to collapse a standard for price all wondering(a) assets. This model is called the big(p) asset pricing model which is use to determine the necessary arrange of return from either perilous assets. There argon various assumptions of Capital summation determine Model. Some ar realistic and some argon not. Assumptions of Capital Market Theory: 1. every investors ar Markowitz high-octane investors who pauperization to tar scram points on efficient boundary. The exact localization principle on the efficient frontier depends on the gamble-return utility function. 2.Investors go off sorb or spring in either heart of gold at the try of infection slack rate of return. It is continuously possible to lend money at the risk let go of rate by acquire risk free securities much(prenominal)(prenominal) as authorities bonds, treasury bills. besides it is not always 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 opportunity distribution for rising grade of return. But if there be differences in evaluate returns, their make on the model results are not significant. 4.

All the investors bedevil the homogeneous one period sequence horizon. But the model willing be developed for a genius hypothetical period. If investiture periods for investments are different, they would require to poster the risk for investment period. They would as well as require to indentify risk free assets that are consistent with the risk free period. 5.All investments are continuously 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 traffic costs involved in buying or merchandising assets. This is a reasonable assumption in umpteen instances. For cause neither pension specie nor religious groups have to pass on taxes and the transaction cost...If you want to get a panoptic essay, enounce it on our website: Ordercustompaper.com

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