Capital asset pricing model, Financial Management

Assignment Help:

Can you draw Capital asset pricing model with example and explain?????

Related Discussions:- Capital asset pricing model

State the rate of return of a bond - debt securities, Rate of return of a B...

Rate of return of a Bond In case of bonds, rather than dividends, investor is entitled to payments of interest yearly or semi-annually. Investor also benefits if there is an ap

Explain why warrants are rarely exercised, Explain why warrants are rarely ...

Explain why warrants are rarely exercised unless the time to maturity is small? Warrants are hardly ever exercised until the time to expiration is small because the market pric

State the peter drucker rules for acquisitions, Peter Drucker gave five rul...

Peter Drucker gave five rules for acquisitions to be more successful. Contribution e.g. the acquirer can add value to the target organisation other than just providing mone

Define the gropus of profit maximisation criterion, Define the gropus of Pr...

Define the gropus of Profit maximisation criterion Profit maximisation criterion has, though, been questioned and criticized on several grounds. Reasons for the opposition in

Purposes of accounting, explain accounting purposes

explain accounting purposes

What are the coupon bonds security instruments, What are the coupon bonds s...

What are the coupon bonds security instruments? Coupon bonds are contractual agreements by the borrowers to make regular payments (known as coupons or interest) until a specifi

Baumol model, A campany estimate a cash requirment of 900000 the opportunit...

A campany estimate a cash requirment of 900000 the opportunity interst eate is 9% per anual the transaction cost for borrowing or withdrawing fund is 264.5

UMMB, what is the benefits of UMMB

what is the benefits of UMMB

Define conservative type of working capital financing plan, What is the mos...

What is the most conservative type of working capital financing plan a company could implement? Explain. An all equity capital structure would be mainly conservative type of wor

Explain the effect of foreigners’ portfolio investments, As the early 1980s...

As the early 1980s, foreign portfolio investors have purchased an important portion of U.S. treasury bond issues. Discuss the short-term and long-term influences of foreigners’ por

Atom 2/13/2013 4:35:27 AM Capital asset pricing model In finance, the capital asset pricing model (CAPM) is used to calculate a theoretically appropriate required rate of return of an asset, if that asset is to be included to an already well-diversified portfolio, provided that asset''s non-diversifiable risk. The model takes into account the asset''s compassion to non-diversifiable risk (also define as systematic risk or market risk), often presented by the quantity beta (β) in the financial industry, as well as the expected return of a theoretical risk-free asset and expected return of the market. The model was introduced by Jack Treynor (1961, 1962) William Sharpe (1964), Jan Mossin (1966) and John Lintner (1965a,b) independently, creating on the earlier work of Harry Markowitz on modern portfolio theory and diversification. Sharpe, Merton Miller and Markowitz jointly received the Nobel Memorial Prize in Economics for this role to the field of financial economics.

Atom

2/13/2013 4:35:27 AM

Capital asset pricing model

In finance, the capital asset pricing model (CAPM) is used to calculate a theoretically appropriate required rate of return of an asset, if that asset is to be included to an already well-diversified portfolio, provided that asset''s non-diversifiable risk. The model takes into account the asset''s compassion to non-diversifiable risk (also define as systematic risk or market risk), often presented by the quantity beta (β) in the financial industry, as well as the expected return of a theoretical risk-free asset and expected return of the market.

The model was introduced by Jack Treynor (1961, 1962) William Sharpe (1964), Jan Mossin (1966) and John Lintner (1965a,b) independently, creating on the earlier work of Harry Markowitz on modern portfolio theory and diversification. Sharpe, Merton Miller and Markowitz jointly received the Nobel Memorial Prize in Economics for this role to the field of financial economics.

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages