|random walk theory|
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Definition of random walk theory
random walk theory
Security prices change randomly, with no predictable trends or patterns.
theory that stock price changes from day to day are at random; the changes are independent
The analysis of principal-agent relationships, wherein one person, an agent, acts on behalf of
An alternative model to the capital asset pricing model developed by
Security prices sometimes move wildly above their true values.
A random value that can take any fractional value within specified ranges, as
A random variable that can take only a certain specified set of discrete possible
theory that expected spot exchange rate equals the forward rate.
A biased expectations theory that asserts that the implied forward
A form of the pure expectations theory which suggests that the returns on bonds
A biased expectations theory that asserts that the
Principles underlying the analysis and evaluation of rational portfolio choices
Holds that the futures price will be bid down to a level below the expected
A random variable that has a normal probability distribution.
Firms prefer to issue debt rather than equity if internal finance is insufficient.
A biased expectations theory that believes the term structure reflects the
Pure expectations theory
A theory that asserts that the forward rates exclusively represent the expected
Quantity Theory of Money
theory that velocity is constant, and so a change in money supply will change nominal income by the same percentage. Formalized by the equation Mv = PQ.
The technique of storing incoming inventory in any
A function that assigns a real number to each and every possible outcome of a random experiment.
A strategy of introducing into the decision-making process a random element that is
Real Business Cycle Theory
Belief that business cycles arise from real shocks to the economy, such as technology advances and natural resource discoveries, and have little to do with monetary policy.
Static theory of capital structure
theory that the firm's capital structure is determined by a trade-off of the
theory of constraints (TOC)
a method of analyzing the bottlenecks
Debt levels are chosen to balance interest tax shields against the costs of financial distress.
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