A risk factor is a variable associated with an increased risk of disease or infection. Risk factors are Correlation and not necessarily Causality, because correlation does not imply causation.... is a concept in finance theory
Finance theory
Finance theory is the field that deals with investment making decisions and the concept of the time value of money.... such as the CAPM
Capital asset pricing model
In finance, the Capital Asset Pricing Model is used to determine a theoretically appropriate required rate of return of an asset, if that asset is to be added to an already well-diversified Portfolio , given that asset's non-Diversification risk.... , APT
Arbitrage pricing theory
Arbitrage pricing theory , in finance, is a general theory of asset pricing, that has become influential in the pricing of stock.APT holds that the expected return of a financial asset can be modeled as a linear function of various macro-economic factors or theoretical market indices, where sensitivity to changes in each factor is represent... and other theories that use pricing kernels. In these models, the rate of return
Rate of return
In finance, rate of return , also known as return on investment , rate of profit or sometimes just return, is the ratio of money gained or lost on an investment relative to the amount of money invested.... of an asset (hence the converse its price) is a random variable
Random variable
In mathematics, random variables are used in the study of Randomness and probability. They were developed to assist in the analysis of Game of chance, stochastic events, and the results of experiment by capturing only the mathematical properties necessary to answer probability questions.... whose realization in any time period is a linear combination
Linear combination
In mathematics, linear combinations are a concept central to linear algebra and related fields of mathematics.Most of this article deals with linear combinations in the context of a vector space over a field , with some generalisations given at the end of the article.... of other random variable
Random variable
In mathematics, random variables are used in the study of Randomness and probability. They were developed to assist in the analysis of Game of chance, stochastic events, and the results of experiment by capturing only the mathematical properties necessary to answer probability questions.... s plus a disturbance term or white noise
White noise
White noise is a random signal with a flat power spectral density. In other words, the signal contains equal power within a fixed bandwidth at any center frequency.... .
