SML vs CML – Meaning and Differences
SML and CML are two very crucial concepts in finance. SML stands for Security Market Line, while CML’s full form is Capital Market Line.… Read Article
Risk & Return
Risk Adjusted Discount Rate – Meaning, Formula, Example and More
Risk-Adjusted Discount Rate (RADR) is sum total of two components. And these components are the risk-free rate and the risk premium. This rate comes… Read Article
Weak Form of Market Efficiency
What do we mean by Weak Form of Market Efficiency?The Efficient Market Hypothesis (EMH) Model has three versions – Strong, semi-strong, and weak. The… Read Article
Strong Form of Market Efficiency
What is the Strong form of Market Efficiency?The strong form of market efficiency is a version of the EMH or Efficient Market Hypothesis. There… Read Article
Security Market Line
What do we mean by Security Market Line?The Capital Asset Pricing Model is graphically represented by drawing the Security Market Line. It shows the… Read Article
Operational Risk
What is Operational Risk?Operational Risk is a business risk that arises out of day-to-day operations and business activities due to various work-related hazards and… Read Article
Political Risk
What is Political Risk?Political risk is the risk that arises out of uncertainty and instability within the government framework or political institutions in a… Read Article
Legal Risks
What are the Legal Risks?Risk is anything that causes the outcome of an event to be uncertain and adverse. Legal risks are those risks… Read Article
Liquidity Risk
What is Liquidity Risk?Liquidity is an asset quality that measures how easy and quick it is to convert an asset or security into cash… Read Article
Market Risk
What is Market Risk?Market risk is the risk of change or decrease in the value of investments due to changes in uncontrollable market factors.… Read Article
Active Return: Meaning, Formula, Interpretation, Information Ratio, and More
Active Return: MeaningActive Return is the return generated out of the various decisions made by the portfolio manager or the fund manager. Here the… Read Article