Capital Market Assumptions

Capital Market Assumptions (CMAs) are predictions made by financial analysts about future market behaviors, specifically regarding returns on various assets like stocks and bonds. These assumptions are based on historical data, economic indicators, and market trends. They help investors understand potential risks and returns when building investment portfolios. By establishing expectations for things like interest rates and inflation, CMAs guide decision-making, aiming for better investment strategies tailored to different goals and risk tolerances in the capital markets.