Asset pricing I: Pricing Models - Princeton University

ows. The \classic" model for asset pricing, called CAPM, works pretty well: returns with high covariance with the market return have are higher on average as predicted by the mdoel. The beta parameter in the CAPM model derives from the covariance between asset cash-ows and market cash-ows.

  Model, Asset, Pricing, Mapc, Asset pricing, The capm model