Perfect capital market

(redirected from Perfect Capital Markets)

Perfect capital market

A market in which there are never any arbitrage opportunities.

Perfect Capital Market

Any market in which assets are priced with total efficiency. In a perfect capital market, there are no possibilities for arbitrage. See also: Efficient markets hypothesis, Perfect competition.
References in periodicals archive ?
Under the theory of perfect capital markets, a firm should distribute all earnings it does not need in the immediate future and simply issue more equity to finance new initiatives.
MM posited in a 1958 paper that, assuming perfect capital markets and tax neutrality, a firm's mix of debt and equity doesn't affect its value.
In the neoclassical investment model, a model with perfect capital markets, optimization requires that the marginal cost of investment today must be equal to the marginal cost of investment tomorrow.
If the model with perfect capital markets is true, then the orthogonality conditions under the null hypothesis of no capital market frictions should not be rejected and one should expect to obtain consistent parameter estimates.
If the neoclassical model with perfect capital markets is indeed rejected because of financial constraints, then the discount rate estimated in the previous studies should not be different from the discount rate estimated in this article.
may be responsible for data not conforming to the model's prediction, hence finding the neoclassical model, with the perfect capital market, to have been misspecified.
It is well known that, without progressivity, privatizing Social Security (that is, moving to a defined-contribution system) and prefunding Social Security's existing defined-benefit structure should lead to an identical reduction in unfunded liabilities within a deterministic economy with perfect capital markets.
So far, the analysis here has shown that under a constitutional state, perfect competition, and perfect capital markets, corruption almost inevitably is limited and transient and is likely to bolster economic growth and welfare.
Without perfect capital markets, the dictator runs a considerable risk when he lends out resources to an innovator, the value of whose ideas is yet unproved.
In a perfect capital market, acting through the market allows non-innovating agents to diversify their risks.
With perfect capital markets there is a single world interest rate with a constant value, [Mathematical Expression Omitted].
Third, the model is consistent with two countries having permanently different levels of output per person, even in the presence of perfect capital markets and free trade.