capital asset pricing model
- capital asset pricing model
- CAPM
A theoretical framework in financial economics for analysis of the relationships between the *risks and *returns of securities. CAPM suggests that securities’ *prices tend to adjust to ensure that securities’ returns adequately reward investors who bear the risk of holding them within a perfectly *diversified *portfolio. CAPM makes a number of assumptions, including the following:
(i) all the investors in a market hold a diversified portfolio of securities, so the activity of any single security will not materially affect the market;
(ii) the risk of a particular security can be assessed only in terms of its performance to the rest of the portfolio; and
(iii) the price of a security whose returns follow market trends will tend to be low. CAPM states that a security’s risk can be analyzed into *systematic and *unsystematic risk. The former is nondiversifiable risk and it is measured by the use of *beta (definition 1); the latter is a diversifiable risk.
Auditor's dictionary.
2014.
Look at other dictionaries:
Capital Asset Pricing Model — Saltar a navegación, búsqueda El Capital Asset Pricing Model, o CAPM (trad. lit. Modelo de Fijación de precios de activos de capital) es un modelo frecuentemente utilizado en la economía financiera. El modelo es utilizado para determinar la tasa… … Wikipedia Español
Capital asset pricing model — 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, given that asset s non diversifiable… … Wikipedia
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. The CAPM asserts that the only risk that is priced by rational investors is systematic risk,… … Financial and business terms
Capital asset pricing model — Modèle d évaluation des actifs financiers Pour les articles homonymes, voir CAPM. Le Modèle d évaluation des actifs financiers (MEDAF), traduction approximative[1] de l anglais Capital Asset Pricing Model (CAPM) fournit une estimation de valeur… … Wikipédia en Français
Capital Asset Pricing Model — Das Capital Asset Pricing Model (CAPM) (zu deutsch: Preismodell für Kapitalgüter bzw. Kapitalgutpreismodell) ist ein Kapitalmarktgleichgewichtsmodell, das die Portfoliotheorie um die Frage erweitert, welcher Teil des Gesamtrisikos eines… … Deutsch Wikipedia
Capital Asset Pricing Model — El Capital Asset Pricing Model, o CAPM (trad. lit. modelo de valuación de activos de capital) es un modelo frecuentemente utilizado en la economía financiera. Sugiere que, cuanto mayor es el riesgo de invertir en un activo, tanto mayor debe ser… … Enciclopedia Universal
capital asset pricing model — kapitalo įkainojimo modelis statusas T sritis turto vertinimas apibrėžtis Modelis, pagal kurį akcijų ar akcijų portfelio kapitalo kaina yra lygi nerizikingai palūkanų normai, pridėjus akcijų ar akcijų portfelio sistemos riziką atitinkantį rizikos … Lithuanian dictionary (lietuvių žodynas)
Capital Asset Pricing Model - CAPM — A model that describes the relationship between risk and expected return and that is used in the pricing of risky securities. The general idea behind CAPM is that investors need to be compensated in two ways: time value of money and risk. The… … Investment dictionary
Consumption-based capital asset pricing model — The consumption based capital asset pricing model (CCAPM) is used in finance and economics as an expansion of the capital asset pricing model (CAPM). The CCAPM factors in consumption as a means of understanding and calculating an expected return… … Wikipedia
Consumption Capital Asset Pricing Model - CCAPM — A financial model that extends the concepts of the capital asset pricing model (CAPM) to include the amount that an individual or firm wishes to consume in the future. The CCAPM uses consumption measures, in terms of a consumption beta, in its… … Investment dictionary
International Capital Asset Pricing Model (CAPM) — A financial model that extends the concept of the capital asset pricing model (CAPM) to international investments. The standard CAPM pricing model is used to help determine the return investors require for a given level of risk. When looking at… … Investment dictionary
