Arbitrage pricing theory, Microeconomics

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.

Posted Date: 10/15/2012 2:22:25 AM | Location : United States







Related Discussions:- Arbitrage pricing theory, Assignment Help, Ask Question on Arbitrage pricing theory, Get Answer, Expert's Help, Arbitrage pricing theory Discussions

Write discussion on Arbitrage pricing theory
Your posts are moderated
Related Questions
Question 1: i) Elaborate on the different types of price discrimination that a monopolist may use and what are the required preconditions for its application? ii) What dete

A firm's production function is given by Q = √LK . The price of labour is w and the price of capital is r. a. The price of labour is $5 and the price of capital is $20. What is

What does the IS-LM framework mean?  The IS-LM model helps us to understand the two opposing theories. The IS (investment/saving) curve shows equilibrium in product markets. Th

National Budget: A National Budget is a document showing estimates of expected government revenue and intended expenditure for the coming financial year. It usually consist of

what is direct utility in micro economics?

plot the demand schedule and draw the demand curve for the data given for marijuana in the case above

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Profit maximization is theoretically the most sound but practically unattainable objective of business firms. In the light of this statement critically appraise the Baumol’s sales

1. Econ 415 Project Select one time series of real data. The series can be selected from the published data ( http://research.stlouisfed.org/fred2/). The data series must co

Ask questi‘Social welfare functions embody a normative conception of the relative importance of equity and efficiency’. With the aid of diagrams, illustrate and explain this propos