The Capital Asset Pricing Model

Nicholas L. Georgakopoulos ()
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Nicholas L. Georgakopoulos: Indiana University

Chapter Chapter 5 in Illustrating Finance Policy with Mathematica, 2018, pp 55-72 from Palgrave Macmillan

Abstract: Abstract The Capital Asset Pricing Model values risky assets. This chapter explores its foundations in diversification and its limits, the calculation of the sensitivity to movements of the market, i.e., beta, combines them into the CAPM, which relates beta as a measure of risk to expected returns, and reconciles it with the continued usage of price-to-earnings ratios.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:pal:qpochp:978-3-319-95372-4_5

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DOI: 10.1007/978-3-319-95372-4_5

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