Capital Asset Pricing Model , Financial Management

Assignment Help:

What is Capital Asset Pricing Model? Please provide me report on Capital Asset Pricing Model. It is about 2000 words count report on topic Capital Asset Pricing Model.

Related Discussions:- Capital Asset Pricing Model

Shareholders versus managers, Shareholders versus Managers A Limited Li...

Shareholders versus Managers A Limited Liability company is possessed by the shareholders though in most of the cases is managed by a board of directors selected by the shareho

Cash flow& funds flow statement , Explain cash flow and funds flow analysis...

Explain cash flow and funds flow analysis with suitable example from an existing corporate entity for at least three years i.e. 2008, 2009.2010.

Portfolio Management, Portfolio Project The purpose of this project is to h...

Portfolio Project The purpose of this project is to help you to gain an understanding of how the stock market works and of the relationship between theory and practice. You are gi

Advantages of budgetary control, ADVANTAGES OF BUDGETARY CONTROL 1. Pr...

ADVANTAGES OF BUDGETARY CONTROL 1. Profits are maximizes. 2. It makes easy the controlling of activities. 3. Effective co-ordination is made achievable. 4. Executive

Purchasing and discounting of bills, Purchasing and discounting of bills is...

Purchasing and discounting of bills is the most important, from in which a bank lends without any collateral security. Present day commerce is build upon credit. The seller draws a

Managerial Decision Making, I need to get a good understandin about what th...

I need to get a good understandin about what this means?

Hy would a borrower be willing to pay and a lender demand, Would there be p...

Would there be positive interest rates on bonds in a world with absolutely no risk no default risk, maturity risk, and so on? Why would a, borrower be willing to pay and a lender d

Relate lost sales to the definition of incremental cash flow, Relate the co...

Relate the concept of lost sales to the definition of incremental cash flow. While a new capital project is take on it may compete with an existing project or projects, causing t

Define the term- mergers and takeovers, Define the terms- Mergers and takeo...

Define the terms- Mergers and takeovers The terms takeovers and mergers are inter-related. When a company attains the majority of shares of another company, acquired company is

Definition of financial leverage, Q. Definition of financial leverage? ...

Q. Definition of financial leverage? One of the goals of planning an appropriate capital structure is to maximize the return on equity shareholders fund or else maximize the ea

2/14/2013 12:27:16 AM Definition of ''Capital Asset Pricing Model - CAPM'' A model that explains the relationship among risk and expected return and that is utilized in the pricing of risky securities. The common idea behind CAPM is that investors need to be compensated in two ways: time value of money and risk. The time value of money is presented by the risk-free (rf) rate in the formula and compensates the investors for placing money in any type of investment over a period of time. The rest half of the formula represents risk and calculates the amount of compensation the investor requirements for taking on additional risk. This is computed by taking a risk measure (beta) that compares the returns of the asset to the market over a period of time and to the market premium (Rm-rf).

2/14/2013 12:27:16 AM

Definition of ''Capital Asset Pricing Model - CAPM''

A model that explains the relationship among risk and expected return and that is utilized in the pricing of risky securities.

The common idea behind CAPM is that investors need to be compensated in two ways: time value of money and risk. The time value of money is presented by the risk-free (rf) rate in the formula and compensates the investors for placing money in any type of investment over a period of time. The rest half of the formula represents risk and calculates the amount of compensation the investor requirements for taking on additional risk. This is computed by taking a risk measure (beta) that compares the returns of the asset to the market over a period of time and to the market premium (Rm-rf).

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages