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

The ex-dividend price of novis stock, The net income of Novis Corporation i...

The net income of Novis Corporation is $45,000. The company has 20,000 outstanding shares and a 100 percent payout policy. The expected value of the firm one year from now is $1,

Financial Management Strategies, What is a financial management strategy?

What is a financial management strategy?

Explain term financial intermediaries, Financial intermediaries Financi...

Financial intermediaries Financial intermediaries are significant to the efficient functioning of the financial markets as they act to bring the borrowers/companies and lenders

Viability of project - syringe management, The syringe management program t...

The syringe management program tries to educate society by increasing the capacity and quantity of the syringe disposable centers , providing timely responses to all syringe compla

State about the capital structure of financial risk, State about the capita...

State about the capital structure of financial risk Frequently the funds supplied to a firm by lenders will change its financial structure and charge for the funds would be bas

What is an audit?, Question 1 What is Depreciation? Question 2 What a...

Question 1 What is Depreciation? Question 2 What are the elements of an accounting system? Question 3 How do you prepare Flexible Budget? Question 4 Briefly explain

Margin and marking to market, The collaterals used in the repo market...

The collaterals used in the repo market are high quality securities; but they are also not free from credit risk. In our earlier example, we see the dealer borrow

How do tax considerations affect the cost of debt, How do tax consideration...

How do tax considerations affect the cost of debt and the cost of equity? For the reason that interest on debt is tax deductible to the issuing firm, the higher the tax rate th

Agency policy theorem, How might management try to solve the problems foun...

How might management try to solve the problems found in agency theorem

Determine market risk premium, To determine Henkel's corporate beta, unleve...

To determine Henkel's corporate beta, unlever (and relever) the ordinary least squares (OLS) market betas for each company in the European Household and Personal Care segment. Pric

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