Market return

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Market return

Market Return

In Markowitz Portfolio Theory, the return on a theoretical portfolio of all assets in the world where the portfolio is weighted for value.
References in periodicals archive ?
In that instance Alaska Permanent Capital Management strives to produce a market rate of return based upon specific, predetermined risk characteristics.
Neal concludes that for those companies whose returns are strongly correlated with the market rate of return, the evidence is consistent with the modem theory of the tradeoff between risk and rate of return.
That lets them take advantage of the market rate of return, which is much higher than what the Social Security System offers (especially for younger workers, who will likely receive a negative return on their payroll contributions).
World Values invests a small percentage of its capital in microlending institutions like Grameen Bank and EEAF, and it offers a market rate of return.
A cautionary note: It is easy to invest in financial assets and earn the market rate of return, simply by purchasing a broad-based index fund.
The capital asset pricing model [cost of equity = risk-free rate + beta (risk premium, the historical difference between the market rate of return and the risk-free return)] and the dividend discount model [price = earnings per share/(cost of equity - growth rate)] establish an inverse relationship between a company's price/earnings ratio and risk.
sv] measures the correlation between the "true" rate of return on the fundamental value of the firm and the market rate of return, and [[Sigma].
With respect to its largest single-family mortgage insurance program, the FHA's subsidy primarily takes the form of relief from the need to earn a private market rate of return for shareholders rather than a direct government appropriation.
The market value is expected to track the potential cash flows that the market as a whole expects from a similar asset using a market rate of return commensurate for the risk in the asset.
In effect, two known inputs (predicted future cash flows and observed market value) are used to impute the apparent consensus market rate of return on the asset or liability.
This contrasts sharply with the standard models in the literature, which assume that a one-year increase in a firm's market rate of return generates permanently higher compensation over the entire remaining career of the CEO.
She criticizes union leadership for negotiating over vesting rules rather than investment policy and for the "noncritical use of the market rate of return criteria," which leads to investments that are profitable in the short run but endanger future employment.