Capital asset pricing model, Financial Management

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



Posted Date: 2/13/2013 4:34:57 AM | Location : United States

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.

Posted by Atom | Posted Date: 2/13/2013 4:35:27 AM

Related Discussions:- Capital asset pricing model, Assignment Help, Ask Question on Capital asset pricing model, Get Answer, Expert's Help, Capital asset pricing model Discussions

Write discussion on Capital asset pricing model
Your posts are moderated
Related Questions
Examine about the Risk-based auditing A risk based audit will be reviewing the risk management process and considering main risks of the organisation as a whole. Risk manage

What is the market risk premium in Spain at the present moment - the number which I have to use in the valuations? It is not possible to talk of "the" market premium for Spain.

Provide three examples of mutually exclusive projects. Mutually exclusive projects are projects which participate against each other for our selection.  If a organization and fir

I have a assignment of financial accounting Its a report on company Assignment length 2000 words

Describe your role in managing a discrete assignment

What is the role of investment banking in investment intermediaries? Investment banks: These banks assist corporations or governments into the issue of new debt or equity

The first step in valuation process is to estimate the cash flows that are expected to be received in the future. In debt securities, there are two types of possi

How does accounts receivable factoring work?  What are the benefits to the two parties involved?  What are the risks? Factoring is when one firm trade accounts receivable (AR)

Cash flow statement analysis Cash flow statement is a primary financial statement and shows cash generating ability of the organisation. Cash generated from operations can b

Q. Final stage of career? The final stage in one's career is difficult for everyone but is it hardest for those who have had continued successes in the earlier stages. After se