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Unformatted text preview: ce of which securities to hold
Asset allocation decision is the primary
determinant of portfolio’s return.
determinant Competitive Markets
Efficient markets theory
→ Should be neither overpriced nor underpriced
→ Should reflect all available information
all Active vs. Passive Management
→ Finding undervalued securities
→ Timing the market Passive management
→ No attempt to find undervalued securities
→ No attempt to time
→ Holding an efficient portfolio
efficient Players in the Financial Markets
→ Net borrowers
→ Net savers
→ Can be both borrowers and savers
Can Financial intermediaries → Banks
→ Investment companies, etc.
Investment Investment Bankers
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This note was uploaded on 12/10/2011 for the course FIN 401 taught by Professor Staff during the Spring '08 term at Miami University.
- Spring '08