Read this article to learn about the top seven theories of investment analysis. The theories are: 1. Flow of Funds Theory 2. Market Efficiency and Random Walk Theory 3. Efficient Market Theory 4. Random Walk Theory 5. Trend Walk Theory 6. Capital Asset Pricing (CAP) Theory 7. Modern Portfolio Theory. Theory # 1. Flow of Funds Theory: To start with, [...]
The following points highlight the top three theories of investment in Macro Economics. The theories are: 1. The Accelerator Theory of Investment 2. The Internal Funds Theory of Investment 3. The Neoclassical Theory of Investment. Theory of Investment # 1. The Accelerator Theory of Investment: The accelerator theory of investment, in its simplest form, is based upon the nation that [...]
Here we detail about the two theories that establish relationship between output and investment. 1. The Naive Accelerator: This hypothesis was put forwarded before the appearance of Keynes and is known as Naive because it remained unaffected by the availability of funds or size of the change in the required capital stock. The Naive Accelerator explains that the optimum capital [...]