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Capital Asset Pricing Model

Capital Asset Pricing Model

Make smart investment decisions to build a strong portfolio
978280626617034EBookPlurilingua PublishingUnderstand the essentials of the capital asset pricing model (also known as CAPM) in just 50 minutes with this practical and concise book. The capital asset pricing model is a mathematical method which is used to estimate the profitability of any financial asset. The CAPM is one of the most popular risk assessment methods and aims to give investors as much information as possible about potential investments, allowing them to create their investment portfolio out of a combination of risky and safe assets as they see fit. This book will provide you with a handy introduction to the CAPM and how to use it to make better investments.  In addition to learning how to get the greatest returns on your investments, you will consider real-life case studies, find out about the tool’s shortcomings, including the limit of portfolio diversification, and learn about related models, such as arbitrage pricing theory and the multifactor model. About the capital asset pricing model The CAPM was developed at a time when the financial markets were beginning to improve and standardize. It allows investors to make informed investment decisions and weigh up the risk of a product with its potential returns. In other words, it helps investors to waste as little money as possible and make rational business choices. Another advantage of the model is that it gives you the appropriate discount rate to calculate the future revenue of a business. Also, although it may be less accurate than other methods, such as arbitrage pricing theory, it is simpler to use. In this book, you will discover how CAPM can help you, learn how to assess a financial asset, and use your results to make better investments. A clear explanation of the benefits and potential drawbacks of the method, a discussion of a practical case study, and an introduction to related models will give you the tools you need to tailor your approach to your situation. This straightforward and accessible 39-page book is structured as follows: Introduction to the capital asset pricing model Theory Context The main aim of the CAPM Assumptions of the model Components of the model Advantages Conclusion Limitations and extensions of the capital asset pricing model Limitations and criticisms Weaknesses and criticisms Related models and extensions Practical application of the capital asset pricing model Advice and best practices Recommendations Case study Summary Understand the essentials of the capital asset pricing model (also known as CAPM) in just 50 minutes with this practical and concise book. The capital asset pricing model is a mathematical method which is used to estimate the profitability of any financial asset. The CAPM is one of the most popular risk assessment methods and aims to give investors as much information as possible about potential investments, allowing them to create their investment portfolio out of a combination of risky and safe assets as they see fit. This book will provide you with a handy introduction to the CAPM and how to use it to make better investments.  In addition to learning how to get the greatest returns on your investments, you will consider real-life case studies, find out about the tool’s shortcomings, including the limit of portfolio diversification, and learn about related models, such as arbitrage pricing theory and the multifactor model. About the capital asset pricing model The CAPM was developed at a time when the financial markets were beginning to improve and standardize. It allows investors to make informed investment decisions and weigh up the risk of a product with its potential returns. In other words, it helps investors to waste as little money as possible and make rational business choices. Another advantage of the model is that it gives you the appropriate discount rate to calculate the future revenue of a business. Also, although it may be less accurate than other methods, such as arbitrage pricing theory, it is simpler to use. In this book, you will discover how CAPM can help you, learn how to assess a financial asset, and use your results to make better investments. A clear explanation of the benefits and potential drawbacks of the method, a discussion of a practical case study, and an introduction to related models will give you the tools you need to tailor your approach to your situation. This straightforward and accessible 39-page book is structured as follows: Introduction to the capital asset pricing model Theory Context The main aim of the CAPM Assumptions of the model Components of the model Advantages Conclusion Limitations and extensions of the capital asset pricing model Limitations and criticisms Weaknesses and criticisms Related models and extensions Practical application of the capital asset pricing model Advice and best practices Recommendations Case study Summary application/pdf1 decision-making, investment, investment portfolio, profitability, risk management
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Understand the essentials of the capital asset pricing model (also known as CAPM) in just 50 minutes with this practical and concise book. The capital asset pricing model is a mathematical method which is used to estimate the profitability of any financial asset. The CAPM is one of the most popular risk assessment methods and aims to give investors as...
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Understand the essentials of the capital asset pricing model (also known as CAPM) in just 50 minutes with this practical and concise book. The capital asset pricing model is a mathematical method which is used to estimate the profitability of any financial asset. The CAPM is one of the most popular risk assessment methods and aims to give investors as much information as possible about potential investments, allowing them to create their investment portfolio out of a combination of risky and safe assets as they see fit.

This book will provide you with a handy introduction to the CAPM and how to use it to make better investments.  In addition to learning how to get the greatest returns on your investments, you will consider real-life case studies, find out about the tool’s shortcomings, including the limit of portfolio diversification, and learn about related models, such as arbitrage pricing theory and the multifactor model.

About the capital asset pricing model

The CAPM was developed at a time when the financial markets were beginning to improve and standardize. It allows investors to make informed investment decisions and weigh up the risk of a product with its potential returns. In other words, it helps investors to waste as little money as possible and make rational business choices. Another advantage of the model is that it gives you the appropriate discount rate to calculate the future revenue of a business. Also, although it may be less accurate than other methods, such as arbitrage pricing theory, it is simpler to use.

In this book, you will discover how CAPM can help you, learn how to assess a financial asset, and use your results to make better investments. A clear explanation of the benefits and potential drawbacks of the method, a discussion of a practical case study, and an introduction to related models will give you the tools you need to tailor your approach to your situation.

This straightforward and accessible 39-page book is structured as follows:

  • Introduction to the capital asset pricing model
  • Theory
    • Context
    • The main aim of the CAPM
    • Assumptions of the model
    • Components of the model
    • Advantages
    • Conclusion
  • Limitations and extensions of the capital asset pricing model
    • Limitations and criticisms
    • Weaknesses and criticisms
    • Related models and extensions
  • Practical application of the capital asset pricing model
    • Advice and best practices
    • Recommendations
    • Case study
  • Summary

Product details

ISBN

9782806266170

Publisher

Plurilingua Publishing

Serie

50MINUTES.COM – Business

Format

PDF

Pages

34

File size

3.4 MB