Tag: Risk and Return

  • Trading at a Discount

    Trading at a Discount

    When a security trades at a price below its intrinsic value, it is described as “trading at a discount.” This phenomenon, influenced by macroeconomic factors and specific company events, has been a recurring theme throughout financial market history.

  • Complete Market

    Complete Market

    In complete markets, every possible outcome has a corresponding financial instrument, facilitating total risk mitigation. This environment is free of arbitrage and optimally processes market information. Nonetheless, achieving perfect market completeness is often elusive in practice.

  • Efficient Frontier

    Efficient Frontier

    The Efficient Frontier is a concept from Modern Portfolio Theory representing a set of optimal investment portfolios that offer the highest possible expected return for a given level of risk. It’s a valuable tool for balancing risk and return in investment strategy.