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In finance, the capital asset pricing model (CAPM) is used to determine a theoretically appropriate required rate of return of an ... more

Capital market line (CML) is the tangent line drawn from the point of the risk-free asset to the feasible region for risky ... more

The dividend discount model is a method of valuing a company’s stock price based on the theory that its stock is worth the sum of all of its future ... more

In finance, leverage is a general term for any technique to multiply gains and losses. Most often it involves buying more of an asset by using borrowed ... more

The Sortino ratio measures the risk-adjusted return of an investment asset, portfolio, or strategy. It is a modification of the Sharpe ratio but penalizes ... more

In finance, return is a profit on an investment. return is also used to refer to a profit on an investment, expressed as a proportion of the amount ... more

The Black–Scholes /ˌblæk ˈʃoʊlz/ or Black–Scholes–Merton model is a mathematical model of a financial market containing derivative investment instruments. ... more

A perpetuity is payments of a set amount of money that occur on a routine basis and continues forever. Present value of a perpetuity is an infinite and ... more

Compound interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on. This addition of ... more

Rule of 72 is a method for estimating an investment’s doubling time. The rule number 72 is divided by the interest percentage per period to obtain ... more