Abnormal Return
What is Abnormal Return?An abnormal return is defined as ‘an unexpected, not-anticipated return on investments throughout a period of time. The reason can be… Read Article
Beta
Unsystematic Risk – Meaning, Types, Advantages, and More
What is Unsystematic Risk?Unsystematic risk is a risk that is inherent and specific to a company or industry. As we know, each and every… Read Article
Hamada Equation-Meaning, Example and More
Hamada equation distinguishes the financial risk from the business risk of a levered firm. A levered firm’s capital structure consists of both equity and… Read Article
Advantages and Disadvantages of CAPM
What is CAPM?As the name itself suggest, the Capital Asset Pricing Model (CAPM) is used for pricing the security with a given risk. This… Read Article
Systematic Risk – Meaning, Types And How To Measure It
Systematic risk occurs due to macroeconomic factors. It is also called market risk or non-diversifiable or volatility risk as it is beyond the control… Read Article
Arbitrage Pricing Theory
Arbitrage Pricing Theory (APT) is an alternate version of the Capital Asset Pricing Model (CAPM). This theory, like CAPM, provides investors with an estimated… Read Article
Cost of Equity – Capital Asset Pricing Model (CAPM)
The cost of equity is estimated using Sharpe’s Model of Capital Asset Pricing Model. The model finds the cost of capital by establishing a… Read Article