This week is all about asset pricing models (CAPM and APT). Let's take a look at the models practical applications. Which model do you think can do a better job explaining rates of return on risky...

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Chapter 9
Confidence Interval Estimation
The CAPM lets depositors to enumerate the expected return on asset given the speculation risk, expected return that is risk free, predictable return on market and beta of an asset or portfolio. The formulae is Re= Rf + (Rm-Rf)*Beta.
Arbitrage pricing theory
The APT helps as an substitute to the CAPM, and it uses fewer expectations and may be firmer to contrivance as compared to CAPM. Ross advanced the APT on a foundation that the prices of stocks are driven by numerous factors,...