Asset pricing model

Asset Pricing Model
Asset Pricing Model definition :
A model for determining the required or expected rate of return on an asset. Related: Capital asset pricing model and arbitrage pricing theory.
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Asset pricing model
A model, such as the Capital asset pricing model (CAPM), that determines the required
rate of return on a particular asset.
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Capital Asset Pricing Model
Capital Asset Pricing Model (CAPM) is a sophisticated mathematical method of formulating a relationship between expected risk and expected return.

Capital Asset Pricing Model Investing Strategy
Do you know how much risk you are taking when investing in an instrument? Do you know whether the instrument is rightly priced?

Capital Asset Pricing Model (CAPM)
Equation in modern portfolio theory expressing the idea that securities in the market are priced so that their expected return will compensate investors for their expected risk.

Capital Asset Pricing Model (CAPM)
Definition
A cost of capital model which represents the required rate of return on business investment as a sum of the risk-free return plus a weighted risk premium.

ASSET PRICING MODEL - A model for determining the required or expected rate of return on an asset. Rela...
ASSET PURCHASE - A type of transaction in which the buyer purchases assets from the target company, rat...

Capital asset pricing model
Investment Dictionary:
Capital Asset Pricing Model - CAPM
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Capital Asset Pricing Model (CAPM)
theory of asset pricing used to analyze the relationship between risk and rates of return in securities.

CAPITAL ASSET PRICING MODEL (CAPM) (Encyclopedia)
The Capital Asset Pricing Model (CAPM) is a market equilibrium model used to define the existing trade off between risk and expected return in portfolio choices.

Capital Asset Pricing Model CAPM
Definition of Capital asset pricing model. This is a way of valuing a portfolio of assets. The valuation depends not just on capital gains and income but also on how much it contributes to overall risk.

The capital asset pricing model holds that the expected return on a security or portfolio equals the rate on a risk-free security plus a risk premium.

In finance, the capital asset pricing model (CAPM) is used to determine a theoretically appropriate required rate of return of an asset, if that asset is to be added to an already well-diversified portfolio, ...

William Sharpe (1964) published the capital asset pricing model (CAPM). Parallel work was also performed by Treynor (1961) and Lintner (1965).

asset pricing models: A way of mapping from abstract states of the world into the prices of financial assets like stocks and bonds.

Capital Asset Pricing Model (CAPM)
Sophisticated model of the relationship between expected risk and expected return. The model is grounded in the theory that investors demand higher returns for higher risks.

Capital Asset Pricing Model (CAPM)
An economic theory that describes the relationship between risk and expected return, and serves as a model for the pricing of risky securities.
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Capital asset pricing model
A method of valuing ASSETS and calculating the COST OF CAPITAL (for an alternative, see ARBITRAGE PRICING THEORY). The capital asset pricing model (CAPM) has come to dominate modern finance.

Capital Asset Pricing Model (CAPM)
A model that looks at the relationship between risk and return. In simple terms, the CAPM says that the return on an asset or security is equal to the risk-free return plus a risk premium.

Capital Asset Pricing Model (CAPM) An equation relating an asset's relative riskiness (beta) to its required return. An element of modern portfolio theory.

Capital Asset Pricing Model (CAPM)
A model for describing the way prices of individual assets are determined in an efficient market, based on their relative riskiness in comparison with the return on risk-free assets.

Capital Asset Pricing Model. A system of equations that describes the way prices of individual assets are determined in efficient markets, that is, in markets where information is freely available and reflected instantaneously in asset prices.

Capital Asset Pricing Model - Is a tool that relates an asset's expected return to the market's expected return. It combines the concepts of efficient capital markets with risk premiums.

Capital Asset Pricing Model (CAPM) A theoretical construct, developed by William Sharpe and John Lintner, according to which, a security's return is directly related to its SYSTEMATIC RISK, that is, ...

Capital Asset Pricing Model (CAPM): A theoretical model that relates the return on an asset to its risk, where risk is the contribution of the asset to the volatility of a well diversified portfolio (an asset's "beta").

The capital asset pricing model (CAPM) is an equilibrium theory that relates the expected return of an asset to its market risk.
It can be calculated as follows:
k = rf + ( β x ( rm - rf ) ) ...

The Capital Asset Pricing Model: An Overview
Determining Risk And The Risk Pyramid
Understanding Volatility Measurements
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The capital asset pricing model is an economic model that shows that, in equilibrium, risk averse investors in an otherwise perfect economy will price only the systematic risk of a security, (i.e.

Capital Asset Pricing Model CAPM. A formula relating risk to expected return that is used to price particularly... capital budget Plan for new acquisitions and replacements of long-term assets.Assets considered...

Capital asset pricing model A method of valuing securities or an investment using a discounted cash flow (DCF) using a risk adjusted discount rate....

Capital Asset Pricing Model
A model for calculating expected equity returns. It is based on the premise that returns are the reward for taking on risk, and that risk ca...(Read more)
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International Asset Pricing Model (IAPM) - The international version of the Capital Asset Pricing Model in which investors in each country share the same consumption basket and purchasing power parity holds.

1977. 'The Capital Asset Pricing Model: A 'Multi-Beta' Interpretation.' In H. Levy and M. Sarnat, eds., Financial Decision Making Under Uncertainty. New York: Harcourt Brace Jovanovich, Academic Press.
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CAGRSee: Compound Annual Growth Rate CAMPSSee: Cumulative Auction Market Preferred Stocks Capex See: Capital expenditures CAPMSee: Capital asset pricing model CAPSSee: Convertible adjustable preferred stock CARsSee: ...

Security Market Line The linear relationship between expected asset returns and betas posited by the Capital Asset Pricing Model.

CAMPS See: Cumulative Auction Market Preferred Stocks CAPM See: Capital asset pricing model CAPS See: Convertible adjustable preferred stock CARs See: Certificates of Automobile Receivables CARDs See: Certificates of Amortized ...

See: Capital asset pricing model C.A.R.s See: Certificates of Automobile Receivables C.A.R.D.s See: Certificates of Amortized Revolving Debt C.B.O.E. See: Chicago Board Options Exchange C.D. See: Certificate of deposit C.D.N.

[EPA] arbitrage pricing theory An alternative model to the capital asset pricing model developed by Stephen Ross and based purely on arbitrage arguments. [Harvey] arbitrage-free option-pricing models Yield curve option-pricing models.

The equation of the CML is defined by the capital asset pricing model. Equilibrium price The price when the supply of goods matches demand. Equilibrium rate of interest The interest rate that clears the market.

Excess returns Also called abnormal returns, returns in excess of those required by some asset pricing model. Exchange The marketplace in which shares, options and futures on stocks, bonds, commodities and indices are traded.

A - anomalous pricing, arbitrage, asset allocation, asset pricing circularity, asset pricing models, autoregression
B - beta coefficient, Buffett ...

False, the Capital Asset Pricing Model ("CAPM") indicates that the only risk that is expected to lead to a higher return is the non-diversifiable risk that is correlated with overall market risk.

ICAPM
Intertemporal Capital Asset Pricing Model
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Inventor of one of the foundational asset pricing models in finance, the consumption based capital asset pricing model. Duke University professor and Chairman of Smith Breeden Associates.
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A version of the capital asset pricing model derived by Merton that includes extra-market sources of risk referred to as factor.
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Breeden, Douglas T.
Inventor of one of the foundational asset pricing models in finance, the consumption based capital asset pricing model. Chairman of Smith Breeden Associates, and Dean of the Fuqua School of Business.

Jensen index
An index that uses the capital asset pricing model to determine whether a money manager outperformed a market index. The alpha of an investment or investment manager.

? Mentioned in
Capital Asset Pricing Model - CAPM
Capital Market Line - CML
Market Risk Premium ...

Jensen's Measure - A risk-adjusted performance measure that represents the average return on a portfolio over and above that predicted by the capital asset pricing model (CAPM), given the portfolio's beta and the average market return.

Sharpe benchmark
Definition: [crh] A statistically created benchmark that adjusts for a manager's index-like tendencies. Named after William Sharpe, Nobel Laureate, and develDefinition: oper of the capital asset pricing model.

A portfolio of shares might be constructed using statistical analysis of historic returns, price volatility and price correlations of different assets. QA relies heavily on mathematical models such as the capital asset pricing model (CAPM) and the ...

See also: Capital asset pricing model, Expected return, Banks, Expense, Values