Explain the Difference Between "Inside" and "Outside" Strategies

question 80

Essay

Explain the difference between "inside" and "outside" strategies. What factors influence the strategy that a group will choose? How do the strategies that a group chooses to follow affect its success?

---

Definitions:

Expected Return

The mean value of the probability distribution of possible returns from an investment or portfolio.

Expected Return-Beta Relationship

A concept in finance that describes the relationship between the risk of an investment and its expected return, based on the beta coefficient.

APT

The Arbitrage Pricing Theory, a model that determines the required return on an asset by considering various macroeconomic factors.

CAPM

The Capital Asset Pricing Model, a financial theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.