Market price of risk

A measure of the extra return, or risk premium, that investors demand to bear risk. The reward-to-risk ratio of the market portfolio. The New York Times Financial Glossary

Financial and business terms. 2012.

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  • market price of risk — A measure of the extra return, or risk premium, that investors demand to bear risk. The reward to risk ratio of the market portfolio. Bloomberg Financial Dictionary …   Financial and business terms

  • Equilibrium market price of risk — The slope of the capital market line ( CML). Since the CML represents the return offered to compensate for a perceived level of risk, each point on the line is a balanced market condition, or equilibrium. The slope of the line determines the… …   Financial and business terms

  • equilibrium market price of risk — The slope of the capital market line ( CML). Since the CML represents the expected return offered to compensate for a perceived level of risk, each point on the line is a balanced market condition, or equilibrium. The slope of the line determines …   Financial and business terms

  • Market price — In economics, market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics. Market value and market price are equal only under conditions of market… …   Wikipedia

  • Risk-neutral measure — In mathematical finance, a risk neutral measure, is a prototypical case of an equivalent martingale measure. It is heavily used in the pricing of financial derivatives due to the fundamental theorem of asset pricing, which implies that in a… …   Wikipedia

  • Market timing — is the strategy of making buy or sell decisions of financial assets (often stocks) by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from technical or… …   Wikipedia

  • Market failure — is a concept within economic theory wherein the allocation of goods and services by a free market is not efficient. That is, there exists another conceivable outcome where a market participant may be made better off without making someone else… …   Wikipedia

  • Market capitalization — (often market cap) is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding (shares that have been authorized, issued, and… …   Wikipedia

  • price/earnings ratio — (P/E ratio) One of the methods of measuring how highly investors value the earnings of a company. It is calculated by dividing the company s share market price by its earnings per share. Traditionally, a high price/earnings ratio suggests a… …   Law dictionary

  • market — Usually refers to the equity market. The market went down today means that the value of the stock market dropped that day. Bloomberg Financial Dictionary * * * ▪ I. market mar‧ket 1 [ˈmɑːkt ǁ ˈmɑːr ] noun 1. [countable] COMMERCE the activity of… …   Financial and business terms

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