Stock returns and capital asset pricing model Finance essay
The Capital Asset Pricing model CAPM describes the relationship between systematic risk, or the general dangers of investing, and expected returns. The Capital Asset Pricing Model CAPM by William Sharpe 1964 and John Lintner 1965 marks the birth of asset pricing theory, resulting in a Nobel Prize for Prize, the Capital Asset Pricing Model CAPM estimates the expected return on an investment based on the observed systematic risk. The cost of equity is the required return for shareholders. Although the CAPM model for capital asset pricing has been criticized for its unrealistic assumptions, it produces a more useful result than some other return models. This article re-examines the presence of the Sharpe-Treynor-Lintner-Mossin model for capital asset pricing CAPM in the financial literature and is accompanied by a 2. The capital asset pricing model. In short, the Capital Asset Pricing Model CAPM is a model that can be used to examine the relationship between systematic risk and the expected return for assets such as stocks 1. Simply put, the CAPM model generates the expected return of assets given the risk of those assets 1 Expected return, risk-free rate, beta x market risk premium When using the Capital Asset Pricing model, the expected return is what an investor can expect to earn on an investment over its life. The purpose of this study is to investigate the risk level and stock returns during the corona crisis using the CAPM method of the Capital Asset Pricing Model in companies listed in the Indonesian market. The second part of the article includes a discussion on assessing the performance of two respective mutual funds and pension funds invested in Argentine junk bonds. According to Levy 2011, pg. 55, the Capital Asset Pricing Model CAPM is used to determine the required return on various risky assets, such as: The Capital Asset Pricing Model CAPM is a financial model used to determine the expected return on an investment based on the systematic risk thereof. , as measured by beta, and the risk-free return and market risk premium. CAPM provides a framework for calculating the required rate of return for an investment, taking into account:,