Market model

Market 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. The return also depends on conditions that are unique to the firm. The market model can be graphed as a line fitted to a plot of asset returns against returns on the market portfolio. This relationship is sometimes called the single-index model.

Market Model

The relationship between a security's performance and the performance of a portfolio containing it. The market model states that the security's performance is related its portfolio's performance according to its beta; that is, if a security has a beta of 2, and the portfolio rises 10%, then that particular security generally rises 20%. See also: Markowitz Portfolio Theory.
References in periodicals archive ?
providing the service to be treated entity will be accounted for by the change in the electricity market models and acquired entity will be compatible with future joint Nordic market model (DataHub).
Establishing the gas market model in the Danube region is a positive step for the safety of the energy supply in Central Europe, Hungarian MEP Andras Gyurk (EPP) said, on 20 June, during a conference held at the European Parliament to discuss the state of play of this model.
In this paper Peter Moss, a Professor of Early Childhood Provision at the University of London, challenges the hegemony of the market model in early childhood education and care.
today announced the debut of its new 2007 European market model FZ6 Fazer spec2 (with cowling) and FZ6 spec2 (without cowling) at Intermot 2006, the world's leading motorcycle and scooter show, being held from October 11-15 in Cologne, Germany.
The paper offers four financial models, including the "liberal" market model in which people spend their money on whatever they like; the INCP thinks such markets consist of "cultural products intended for mass consumption.
In World on Fire (Doubleday), Amy Chua, professor of law at Yale, diverges from the apostles of globalization, who reaffirm that exporting the free market model will increase peace and prosperity around the world.
For example, some prior studies employ the commonly used one-index market model, while others use a two-index market model that includes a global or foreign equity index besides an U.
It's a centralized agency auction market model, meaning that it tries to attract as many buyers and sellers in a single location to insure that the price discovery is done with the maximum amount of supply and demand in the marketplace.
At the same time, Allvine's long-term stock market model posts a reading of 19.
But he manages to ignore the 1995 economic crisis caused by Mexico's adoption of the free market model, and neglects the loss of hundreds of thousands of jobs in the United States due to NAFTA.
They use a heteroscedastic market model showing that betas will vary with the level of aggregate market volatility: