Arbitrage pricing theory, Microeconomics

Assignment Help:

Arbitrage Pricing Theory

Arbitrage defines the procedure of continuously buying a security for privacy, currency, or commodity on one market and selling it in another.  Price variations between the two markets give the arbitrageur his or her profit. The arbitrage pricing theory is based upon the concept of arbitrage, and define how assets should be valued if there were no riskless arbitrage opportunities.  When security markets are competitive and effective, then chances to profit from arbitrage should be nonexistent.


Related Discussions:- Arbitrage pricing theory

Determine the sources of divergence, Sources of Divergence The principa...

Sources of Divergence The principal cause of extraordinary variation in output per worker between countries today are differences in their corresponding steady-state capital-ou

Economic Growth, the prevention of major swings in economic activity cn be ...

the prevention of major swings in economic activity cn be handled most easily by the financial or government sector?

Calculate the profit maximizing price, Suppose you have 10 individuals with...

Suppose you have 10 individuals with values {$1, $2, $3, $4, $5, $6, $7, $8, $9, $10}.  Your marginal cost of production is $2.50.  What is the profit-maximizing price?  Using this

Bookseller, Nile.com, the online bookstore, wants to increase it''s total r...

Nile.com, the online bookstore, wants to increase it''s total revenue. One strategy is to offer a 10% discount on every book that sells. Nile.com knows it''s customers can be divid

What is meant by own price elasticity of demand, Problem: i) What is me...

Problem: i) What is meant by ‘own' price elasticity of demand? What factors are likely to affect the size of this elasticity? ii) A publicly owned bus line is running at

Oligopoly, stackelberg,bertnart,cournet about oligopoly

stackelberg,bertnart,cournet about oligopoly

Coefficient of the explanatory variable, Problem: (a) Why is an error t...

Problem: (a) Why is an error term added to a regression and explain its importance in the OLS procedure? (b) Suppose we have a linear equation with a constant term, one expl

Exchange rate policy, Exchange Rate Policy: LERMS, a dual exchange ra...

Exchange Rate Policy: LERMS, a dual exchange rate system, was introduced in the Budget for 1992-93. Under this system, 40 per cent of foreign exchange earnings were to be sur

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd