Market model

Market model

 

 

Market model

 

Meaning of Market model

Market model This relationship is sometimes called the single-index model. The market model says that the return on a security depends on the return on the market portfolio and the extent of the security's responsiveness as measured, by beta. In addition, the return will also depend on conditions that are unique to the firm. Graphically, the market model can be depicted as a line fitted to a plot of asset returns against returns on the market portfolio.

 

Source: http://www.saint-claire.org/resources/Dictionary-of-Financial-and-Business-Terms.pdf

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Author of the text: R. de Paula Lico JĂșnior

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Market model

 

Market model

 

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Market model

 

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