The goal of investing is, of course, to make a profit. The revenue from investing, or the loss in the case of a negative revenue, depends upon both the change in prices and the amounts of the assets being held. Investors are interested in revenues that are high relative to the size of the initial investments. Returns measure this, because returns on assets are changes in price expressed as a fraction of the initial price.
KeywordsRandom Walk Stock Prex Geometric Brownian Motion Excess Kurtosis Fundamental Analysis
Unable to display preview. Download preview PDF.
- Bachelier, L. (1900) Theory of speculation, Gaulthier-Vilar, Paris. (English translation by A. J. Boness reprinted in Cootner (1964).)Google Scholar
- Bernstein, P. (1996) Against the Gods: The Remarkable Story of Risk, Wiley, New York.Google Scholar
- Bernstein, P. (1992) Capital Ideas: The Improbable Origins of Modern Wall Street, Free Press, New York.Google Scholar
- Bodie, Z., Kane, A., and Marcus, A. (1999) Investments, 4th Ed., Irwin/ McGraw-Hill, Boston.Google Scholar
- Cootner, P. (ed.) (1964) The Random Character of Stock Market Prices, MIT Press, Cambridge, MA.Google Scholar
- Fama, E. (1991) Efficient Capital Markets: II, Journal of Finance, 46, 1575–1618.Google Scholar
- Gilovich, T. (1993) How We Know What Isn’t So (Paperback Ed.), Free Press, New York.Google Scholar
- Malkiel, B. G. (1999) A Random Walk Down Wall Street (Updated and Revised Ed.), W. W. Norton, New York.Google Scholar
- Samuelson, P. (1965) Proof that properly anticipated prices fluctuate randomly, Industrial Management Review, 6, 41–50.Google Scholar
- Sharpe, W. F., Alexander, G. J., and Bailey, J. V. (1999) Investments, 6th Ed., Prentice-Hall, Upper Saddle River, NJ.Google Scholar
- Shefrin, H. (2000) Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing, Harvard Business School Press, Boston.Google Scholar