Application of Capital Asset Pricing Model in the function of determination of expected yield of companies in the capital markets Republic of Srpska
Journal Title: Acta Economica - Year 2016, Vol 14, Issue 24
Abstract
When is Harry Markowitz made the first foundations of the development of portfolio theory, William Shape, John Lintner and Jan Mossion in the early 60s of the 20th century are developed a Capital Asset Pricing Model - CAPM. The first time it was presented by William Shape, publication work entitled „Capital asset prices: a theory of market equilibrium under conditions of risk”, which in 1990 won the Nobel Prize for economy. Capital Asset Pricing Model allows accurate prediction of the relationship between risk and yield adequate financial instrument. In developed market equity investors often used this model when calculating the expected return of the corresponding financial instrument. Also, the model can also be used for other purposes, and in order to facilitate the investors making important business decisions. Although the model is not empirically verified and it is the subject of critiques by some authors, its use is broad because of precise determination of risk and yield relation in financial instruments and his appropriate accuracy.
Authors and Affiliations
Драган Јањић
Keywords
Related Articles
- EP ID EP43831
- DOI https://doi.org/10.7251/ACE1624191J
- Views 241
- Downloads 0
FINANCIAL CRISIS AND ITS OVERCOMING
The relation between demand and supply at the world markets has to be balanced involving their mutual concordance with the amount of money. Although, there should be more money and loans than there are international trad...
Economic system incentives for the development of small enterprises
The expectations of small enterprises are large but on the other hand, running a business of small enterprises has diffculties due to numerous obstructions. The present fscal and administrative regulations are not stimul...
HYBRID METHODOLOGY OF NONLINEAR GOAL PROGRAMMING
What we demonstrate here is a nonlinear goal-programming (NLCP) algorithm based on original hybrid connection of the modified simplex method of goal programming, gradient method of feasible directions and method of optim...
Model of structural equation of influence knowledge economy on growth of gross domestic product
The modern age is often described using the terms information society, post-industrial society, knowledge economy, e-culture. Each of these phrases stresses some of the components of our modernity and is the result of ma...
Inclusion of stocks in the index
Index inclusion is one of a technical anomaly in the focus of behavioral finance which cannot be explained from the viewpoint of traditional finance. Starting from globalization of world financial markets and the fact th...