The portofolio administering at the isurance companies by A.P.T. multifactorial model

Mitica Pepi
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Mitica Pepi: “OVIDIUS” University, Constanta

Theoretical and Applied Economics, 2008, vol. 11(528)(supplement), issue 11(528)(supplement), 173-179

Abstract: In order to approach the A.T.P. model (arbitrage price theory) the understanding of some aspects related to arbitrage in general is necessary, APT being only one of the implications of this finance central theory (of the lack of arbitrage opportunities), among the others one being able to quote: the theory of including the parity buying power opportunities, the theories concerning the company value and the indebtedness degree, et… An opportunity of arbitrage represents an investment strategy that guarantees a positive result in at least one of the nature states without the possibility of a negative result and without an initial investment. The lack of arbitrage opportunities presumes that, being given a portofolio the value of which at t is 0, Vt = 0, there is no admitted strategy so that at t+1 moment it should be Vt + 1>0 in least one state. If the no other arbitrage opportunities it is said that the market is viable.

Keywords: arbitrage; price theory; the principle of diversification; value of risk; insurance market. (search for similar items in EconPapers)
Date: 2008
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