CAPM: The Model and 307 Comments About It

46 Pages Posted: 14 Nov 2014 Last revised: 26 May 2019

See all articles by Pablo Fernandez

Pablo Fernandez

University of Navarra - IESE Business School

Date Written: October 17, 2017


We show, as simply as possible, the model’s development, its implications and the assumptions on which it is based.

The paper also contains 307 interesting comments and criticism from several professors, finance professionals and Ph.D. students about the CAPM: 234 basically agree in using the adjective “absurd” to qualify the CAPM and 71 do not agree for several reasons that are in sections 3 and 4. I thank very much to all of them: I have learned a lot reading (and thinking about) their opinions: real opinions of real persons that know finance and have thought about the CAPM, the market return, the beta, the market risk premium.

Keywords: CAPM; Expected beta; historical beta; required beta; Expected Market Risk Premium; Required Market Risk Premium; Expected Return to Equity; Required Return to Equity

JEL Classification: G12, G31, G32

Suggested Citation

Fernandez, Pablo, CAPM: The Model and 307 Comments About It (October 17, 2017). Available at SSRN: or

Pablo Fernandez (Contact Author)

University of Navarra - IESE Business School ( email )

Camino del Cerro del Aguila 3
28023 Madrid
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)


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