CAPM Archives - IGNOU CORNER

What is Capital Asset Pricing Model? How is it related with the Efficient Market Hypothesis? How can we apply Efficient Market Hypothesis in real life? Give examples

Introduction The Capital Asset Pricing Model (CAPM) and the Efficient Market Hypothesis (EMH) are two fundamental theories in finance that help explain how assets are priced and how markets behave. CAPM provides a method to determine the expected return on an investment, while EMH explains how information is reflected in market prices. This answer covers […]

What is Capital Asset Pricing Model? How is it related with the Efficient Market Hypothesis? How can we apply Efficient Market Hypothesis in real life? Give examples Read More »

What is capital asset pricing model and arbitrage pricing theory? Differentiate between them.

Introduction The Capital Asset Pricing Model (CAPM) and Arbitrage Pricing Theory (APT) are two widely used models in financial management for determining the expected return on investments and assessing risks. While both models aim to price assets considering their risk, they are based on different assumptions and methodologies. This article explores the concepts of CAPM