Asset pricing models (CAPM and APT) Essay Example | Topics and Well Written Essays - 1000 words

Asset pricing models (CAPM and APT) - Essay Example The information of risk observed in similar types of the asset in the market will help the investor to get a true picture towards acquiring the asset. The observed risk factors will help in determining the real value of that asset (Kerzner & Saladis, 2010). There are many small investors who are the price taker. There is no tax on the asset. Investment should be of public related assets for example: shares and bonds. All the investors are adopting same strategy and provide combine information about the asset (Fabozzi et al., 2006). Investor can get information from the market to apply CAPM model, but it is also possible that the information is incomplete or not at large practiced. The investors in market applying CAPM pricing model are basically small investors. Small investors usually buy little bit stocks of asset and sell if the price of that asset increased (KÃ ¼rschner, 2008). The risk factor cannot be perfectly determined by the small investors because they acquire the assets on equilibrium price set by the market. Small investors can take risk but valuable risk factor can be determined by the large investors. Although tax on the asset is generally added to the cost of the asset but in determining the price model of CAPM, the tax factor will not be included. The information regarding the particular asset does not contain the information of tax imposed on it (Loskamp, 2007). APT is the model which can provide well diversified information about the risk factors as well as expected returns of that asset. Agents are appointed under this model to get information quite reliable regarding the risk and returns of an asset. Agent provides the expected returns of the asset depending on his experience. Risk factor calculated by the agent is more preferable because it is actually based on the whole market review (Focardi & Fabozzi, 2004). The agents charge price for providing information of the asset. Investor has to choose the agent which has the

FIELD PROJECT ANALYSIS or PERSAUSIVE PAPER Essay

FIELD PROJECT ANALYSIS or PERSAUSIVE PAPER - Essay Example Workforce diversity is crucial because it contributes to the productivity and profitability of the company through injecting multiple talents to the company structure. Similarly, organizational culture is essential to facilitate interactive and harmonious socialization of a diverse workforce to attain the company objectives. Studies reveal a viable relationship between diversity of the workforce and organizational structure of a company to attain best results. When people come into contact and interact with each other, there is the likelihood for people with the common interest and features form an influential cohesive team to gain organizational goals and objectives. Therefore, companies and organizations require an effective organizational structure to guide their operations, code of conducts and direct their goals and objectives, (Ashkenas, 1995). Companies with diverse people cannot work without organizational structure because the organizational structure is the main framework f or the organization of the company, and the underpinnings that maintain the functioning of the group. Discussion Organizational culture is the operating strategy that tells the team members how the group is consolidated and how it functions. â€Å"A company’s organizational structure is a critical aspect that determines the company’s performance.† (Osland, Kolb & Rubin, 2001, p. 429). More significantly, the organizational structure describes how leadership is organized, how group partners are accepted and how organizational decisions are made. It is thus, the aim of this discussion to explore the relationships that occur between the company and organizational structure. In other words, the discussion will explore the benefits of developing a viable organizational structure on the levels of productivity of a company (with employees’ diversity) for effective management. Workers, leaders and the anticipated projects influence the organizational structure of the group. The organizational structure aids state the functions and duties of the team members, companies or work team. â€Å"The organization design of the company must much employees with responsibilities and motivate them to best use their talents and tailor roles and strategies that are able to cope with demands and opportunities of workplace† (Osland, Kolb & Rubin, 2001, p. 462). The organizational structure reflects a system of activities or roles and reporting policies in the right place to give members of a team or organization a direction when implementing programs. An effective organizational structure will enable individuals and groups to function efficiently together while implementing ethics of hard work and appropriate work attitudes. Every company or group must have a powerful organizational structure. Experts agree that a well organized and strategic, organizational structure aids support better communication process and justifies lines of power and relation ships of reporting to ensure that processes of workflow in a clear process, (Rant, 2004). A company without an organizational structure is dysfunctional and dead. When the company organizational structure fails communication worsen, disruptions in job product result and bottom-line benefits are impacted. The company must frequently check its organizational structure to ensure it is achieving the needs of the organization as it grows and transforms. Absence of an