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Chapter 27 The Theory of Active Portfolio Management
Chapter 27 The Theory of Active Portfolio Management

Chapter 29
Chapter 29

... • Assume a stock paying out all of its earnings in dividends (D) and that these cash flows will last forever • These cash flows are discounted at a rate (k) which consists of the risk-free rate plus an adjustment for the riskiness of the stock • Therefore the stock price is as follows: – Stock Price ...
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... respect to rm performance in the absence of ex-ante productivity or wealth di erences. Furthermore, existing work analyzes the e ects of credit frictions on product markets in general equilibrium without explicitly modelling capital markets. One exception is Foellmi & Oechslin (2010) who also consid ...
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... Strategic plans of affiliated firms are applied via main firm and the managers of affiliated firms formulate the operating and financial policies of their managing firm in the framework of strategic plans of main firm. The affiliated firms always meet the demands of group firms and by keeping their ...
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Financial economics

Financial economics is the branch of economics characterized by a ""concentration on monetary activities"", in which ""money of one type or another is likely to appear on both sides of a trade"". Its concern is thus the interrelation of financial variables, such as prices, interest rates and shares, as opposed to those concerning the real economy. It has two main areas of focus: asset pricing (or ""investment theory"") and corporate finance; the first being the perspective of providers of capital and the second of users of capital.The subject is concerned with ""the allocation and deployment of economic resources, both spatially and across time, in an uncertain environment"". It therefore centers on decision making under uncertainty in the context of the financial markets, and the resultant economic and financial models and principles, and is concerned with deriving testable or policy implications from acceptable assumptions. It is built on the foundations of microeconomics and decision theory.Financial econometrics is the branch of financial economics that uses econometric techniques to parameterise these relationships. Mathematical finance is related in that it will derive and extend the mathematical or numerical models suggested by financial economics. Note though that the emphasis there is mathematical consistency, as opposed to compatibility with economic theory.Financial economics is usually taught at the postgraduate level; see Master of Financial Economics. Recently, specialist undergraduate degrees are offered in the discipline.Note that this article provides an overview and survey of the field: for derivations and more technical discussion, see the specific articles linked.
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