CAPM: The Model and 307 Comments About It
46 Pages Posted: 14 Nov 2014 Last revised: 26 May 2019
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: Suggested Citation