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In economics, a liquidity premium is the explanation for a difference between two types of financial securities (e.g. stocks), that have all the same qualities except liquidity. [1] It is a segment of a three-part theory that works to explain the behavior of yield curves for interest rates. The upwards-curving component of the interest yield ...
(The Beta of the Security) * (The Market Risk Premium) [13] In this model, we use the implied risk premium (market return less risk-free rate) and multiply this with the beta of the security. The beta of a security is the measure of a security's volatility relative to the broader market to understand its historical share price movement compared ...
In finance, a warrant is a security that entitles the holder to buy or sell stock, typically the stock of the issuing company, at a fixed price called the exercise price. Warrants and options are similar in that the two contractual financial instruments allow the holder special rights to buy securities. Both are discretionary, and have ...
Security market line (SML) is the representation of the capital asset pricing model. It displays the expected rate of return of an individual security as a function of systematic, non-diversifiable risk. The risk of an individual risky security reflects the volatility of the return from the security rather than the return of the market ...
A securities account, sometimes known as a brokerage account, is an account which holds financial assets such as securities on behalf of an investor with a bank, broker or custodian. Investors and traders typically have a securities account with the broker or bank they use to buy and sell securities.
For premium support please call: 800-290-4726 more ways to reach us. Sign in. Mail. ... A mortgage-backed security is an investment product that consists of thousands of individual mortgages.
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Equity risk premium (ERP) is defined [by whom?] as "excess return that an individual stock or the overall stock market provides over a risk-free rate." [citation needed] equity risk premium (ERP) is the difference between the return on a market portfolio or a stock with average market risk and the risk-free rate of return. From this definition ...