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Moving the standard finance theory further away from practice has led to an increased criticism of standard finance. Much evidence in favor of the absence of perfect investor rationality have called for the need of a new approach and a new point of view offered by behavioral finance. Behavioral finance relies on standard finance, supplements its theory and, according to behavioral economists, gradually substitutes it; however, behavioral finance also faces a number of limitations. The aim of this research is to find answers to the question of whether preference should be given to standard or behavioral finance, in terms of finance theory and investment practice. By applying the methods of qualitative economic analysis, it has been concluded that we should strive towards the integrated application of these theoretical frameworks in order to achieve their synergy, exploit the positive and concurrently eliminate the negative aspects. An example of a theoretical approach that reconciles the differences between standard and behavioral finance is Adaptive Markets Hypothesis (AMH), which is given particular attention in the paper and has not been discussed in the literature in the Republic of Serbia thus far.

An important element of the positive portfolio theory which in addition to the Capital Asset Pricing Model (CAPM) provides an important contribution in terms of understanding the relationship between return and risk and pricing of assets in the capital market is the Arbitrage Pricing Theory (APT). This theory has been in focus of the economists for decades and is gaining advantage over the CAPM model in theory; however, not in practical terms. The paper aims to search for an answer to the question whether, after the four decades since the APT model has been introduced, there is a consensus in the financial literature on the validity and feasibility of this model in practice. The method of qualitative economic analysis, which allows us to draw valid conclusions on the researched issue based on studying the relevant literature, was applied in this paper. The general conclusion of the research is that the consensus on the key factors of the systematic risk has not yet been reached among economic theorists, researchers and practitioners, which would have eliminated the main deficiency of the APT model, ensured its validity and improved the applicability in practice. The lack of consensus on the most important systematic risk factors has been identified, thus indicating the limited scope of the APT model, which at the same time represents the main result of the research.

In addition to the well-established and most commonly used portfolio performance measures, both in theory and practice - the Sharpe ratio, the Treynor ratio and the Jensen's or alpha index, the financial literature also includes other alternative portfolio measures, such as: two modified versions of the Sharpe ratio - the information ratio and the M2 portfolio performance measure, one modified version of the Treynor ratio - the T2 portfolio performance measure, models that measure the market timing abilities of fund managers - the Treynor-Mazuy and the Henriksson-Merton model and a ratio based on the downside risk and the downside deviation as its measure - the Sortino ratio. The paper aims to inform the investors in the Republic of Serbia about the basic features of the aforementioned portfolio performance measures, as well as to point to the importance of understanding the decomposition of the actual portfolio performance of mutual funds.

Portfolio performance evaluation is an integral part of a continuous portfolio management process aimed at improving its efficiency. The importance of being familiar with the evaluation models of mutual fund portfolio performance is reflected in the fact that such models inform individual and institutional investors about the success of portfolio management, as well as about the performance of individual mutual funds; moreover, the portfolio managers identify strengths and weaknesses of the created portfolios based on the mentioned models. In this respect, this paper looks at the methods that are most widely used, both in theory and in practice, to measure portfolio performance: Sharpe index, Treynor index and Jensen's alpha or index. Bearing in mind that none of these methods of portfolio performance measurement is perfect, the author focuses on identifying and understanding the disadvantages and limitations of these models. By identifying and understanding these disadvantages and limitations, their importance and effects are being reduced, while at the same time, the importance and accuracy of the results are being improved.

Central Securities Depositories (CSDs) are special financial institutions crucial for the successful functioning of financial markets. Initially, these institutions were limited to performing the tasks related solely to the registration of issued securities, however, over time their scope of activities has grown and today these institutions also act as clearing houses and provide clearing and settlement services. In order to achieve their core functions efficiently, Central Securities Depositories follow the prescribed international standards and principles. It is vital to network these institutions and have them join international organizations and associations focusing on the development of mutual cooperation and stronger integration. Integration processes involve the harmonization of regulations relating to the functioning of this particular segment of the financial market. By undergoing a process of consolidation, the Central Securities Depository and Clearing House of Serbia (a joint stock company) managed to harmonize its operations with the relevant EU, as well as the international standards and regulations, and is actively involved in a number of European and international organizations and associations that are relevant for its operations.

This work, through comparative analysis, shows the differences in the degree of development of the Serbian and Croat investment funds sectors, but also points out at some of the important similarities. The comparison subjects are the types, number and structure of investments funds, and their assets value. Comparison is also made of the share of the open-end investment funds in the GDP of Serbia and Croatia respectively over the last ten years in order to provide the best illustration of the importance that this sector bears on the economies of the observed countries. The paper finds that Croatia, thanks to its earlier adoption of appropriate legal framework, better development of the capital market, voucher privatisation and privatisation investments funds, had gained advantage over Serbia when speaking of the importance and development level of the investment funds sector.

The need for insurance dates back from the distant past. A lot of time has passed from the primitive insurance forms to its institutionalization and legal implementation. The modern insurance market, regardless of its global character is not equally developed. The unevenness of development is one of its main characteristics, often connected with the achieved level of economic development. Numerous factors influences on the investment activities of insurance companies as the carriers of the insurance market. The subject of this paper will be the examination of the connection of payments of insured sums (damages) on the redistribution of the investment portfolio on the capital market. For this purpose will be formulated two hypotheses, separately for the non-life and life insurance market. Examination of the relationship between the considered variables will be conducted by using SPSS statistical software, ie the Chi-squared test. Regardless of proving the hypotheses will not be possible to draw unique conclusions for both markets.