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Solving Some Simple Problems Using The Capital Asset Pricing Model (CAPM)
Рет қаралды 797
Күн бұрынIn this video, I solve a few simple problems using the CAPM to figure out the expected rate of return on a stock or a portfolio of stocks. I also show how these calculations can be used to determine whether a stock is underpriced or overpriced, based on what CAPM suggests to be the "fair" rate of return on a stock.
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@practicallemonch1k649 3 ай бұрын
Prof, tnx for the video! There is a mistake in calculations in Problem 1: E(R) actually equals 4% + 1.38(5%) = 10.9%, not 20%.
@ninajo5323 3 ай бұрын
my calculation based on the formula is E(R) = 4% +1.39*(5%-4%) = 5.38%
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