capital market theories



Concepts that try to explain and predict the progression of capital (and sometimes financial) markets over time on the basis of the one or the other mathematical model. In general, whenever someone tries to formulate a financial, investment, or retirement plan, he or she (consciously or unconsciously) employs a theory such as arbitrage pricing theory, capital asset pricing model, coherent market hypothesis, efficient market hypothesis, fractal market hypothesis, or modern portfolio theory.

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