The return on a security is
dependent on the return of Market Portfolio and it depends on the unique
conditions of a particular firm. The extent of responsiveness of security is
measured by Beta and a graph line is plotted using asset returns against market
portfolio returns. This describe the relationship between both of them and this
can be termed as Single- Index Mod.
There are various market models that attempts to predict the behaviour of one
or more aspects of the market by using
mathematical interactions between the various participants, economic forces and
the choices made. For example, in securities market, one particular model would
try to explain on maximizing of a particular portfolio return.
Though many markets operate electronically and use latest
technology, we believe nothing can substitute human judgment and accountability.
This ensures our strength by creating orderly opening and closing, lower
volatility, deeper liquidity and improved prices.
Only NYSE market model combines four sources of liquidity. They
are as follows:
Designated Market Makers (DMMs)
DMMs are the only market makers to reduce the volatility; 90% of
the activity is focused on the liquidity of the stocks with this.
Supplement Liquidity Providers
SLPs are aggressively focused on liquidity with the help of
competition to the quote providers that are already existed in the market; 89 %
of the activity is aimed on liquidity with this.
Floor Brokers
Floor brokers are the independent and electronically connected
agents with clients and have access to advanced algorithms; 61% of the activity
is aimed on liquidity with this.
Other Market Members
A particular range of market makers and brokers that place orders
through NYSE’s automated trading; there are many market makers that are active
in both Nasdaq and NYSE.
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