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Market And The Capital Asset Pricing Model

Posted on:2002-09-18Degree:MasterType:Thesis
Country:ChinaCandidate:X F LiuFull Text:PDF
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An efficient capital market is an important part of the economy. With the growing development of China's capital market for ten years, it has been an important part of the Chinese socialist market economy. Along with the development of China's capital market, the study works on development of China's capital market by the Chinese scholars was deepening step by step, they have done a preliminary research on China capital market as well as put forward some meaningful proposal. In recent years, the Chinese scholars have paid a good deal of attention to China's security market efficiency. Obviously, It has the very important theoretical and practical consequences how to analyze and how to improve China's market efficiency. The efficient market theory and capital asset pricing theory are the major building blocks of the modern theory of financial economics. The efficient market theory is used to analyze the equilibrium behavior of price changes through time in capital market. If market prices fully reflect a set of information, it means that the market is efficient with respect to some body of information, this also implies that information in that set cannot be used to guide a trading strategy to "weat the market".The capital asset pricing theory is used to analyze the determinants of asset prices under conditions of uncertainty. It may hypothesize an equilibrium relationship between expected return and risk. There is an intimate theoretical and practical connection between the CAPM theory and the efficient market theory. First, the CAPM theory relies on the key assumptions of the market efficiency. Second, the CAPM theory and the efficient market theory cannot be tested independently of one another in many instances. This thesis consists of two parts. The first part fully introduces the efficient market theory. providing the comprehensive understanding of the issue of the i-narket efficiency. The analysis of such problems can be useful for directing a study of security market efficiency in China. Part 2 is the induction of research works on China's stock market efficiency by Chinese scholars and discussions on the trouble in their jobs. The paper concludes with some guidelines for improving the degree of the security market in China.
Keywords/Search Tags:Efficient Market Hypothesis, Capital Asset Pricing Model, China's Security Market Efficiency
PDF Full Text Request
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