0
What is the main message of Capital Asset Pricing Model to corporations?
Wiki User
∙ 9y ago
The model's message is that an investmentÕs risk premium varies in direct proportion to its volatility compared to the rest of an efficient, competitive market. Capital Asset Pricing Model is a numerical model that explains the connection between risk and return in a rational equilibrium market.
Wiki User
∙ 9y ago
Add your answer:
Earn +20 pts
What is the Capital Asset pricing model used for?
The Capital Asset Pricing Model is a pricing model that describes the relationship between expected return and risk. The CAPM helps determine if investments are worth the risk.
What has the author Haim Levy written?
Haim Levy has written: 'Relative effectiveness of efficiency criteria for portfolio selection' -- subject(s): Investments, Mathematical models, Stocks 'Investment and portfolio analysis' -- subject(s): Investment analysis, Portfolio management 'Research in Finance' 'The capital asset pricing model' 'The capital asset pricing model in the 21st century' -- subject(s): Capital assets pricing model, Capital asset pricing model
In the context of the Capital Asset Pricing Model how would you define beta How are beta determined and where can they be obtained What are the limitations of beta?
In the context of the Capital Asset Pricing Model how would you define beta? How are beta determined and where can they be obtained? What are the limitations of beta?
What has the author Hong Ren Wong written?
Hong Ren Wong has written: 'The theory of capital asset pricing'
What has the author Edward M Rice written?
Edward M. Rice has written: 'Portfolio performance, residual analysis and capital asset pricing model tests' -- subject(s): Capital assets pricing model
What has the author Richard C Stapleton written?
Richard C. Stapleton has written: 'The market model and capital asset pricing theory' 'A note on taxes and the cost of capital' -- subject(s): Corporations, Taxation, Finance, Mathematical models 'International fund management' 'The intertemporal behaviour of asset prices and the equivalent martingale measure for the valuation of contingent claims' -- subject(s): Econometric models, Securities, Prices, Risk assessment
Does the capital asset pricing model help us to get required rate of return or expected rate of return?
expected rate of return
What is the most prevelant model for estimating the cost of equity?
The capital asset pricing model (CAPM) is the dominant model for estimating the cost of equity.
What is an arbitrage pricing theory?
An arbitrage pricing theory is a theory of asset pricing serving as a framework for the arbitrage pricing model.
What has the author Michele Boldrin written?
Michele Boldrin has written: 'Asset pricing lessons for modeling business cycles' -- subject(s): Business cycles, Capital assets pricing model, Econometric models, Risk
Is owner's capital asset?
no owners capital is not an asset its an internal liability for the company
Is owner capital an asset?
no owners capital is not an asset its an internal liability for the company
