(a) What is cross-sectional analysis?
(b) What is CAPM? How do you calculate it?
Capital Asset Pricing Model:
The capital asset pricing model (CAPM) is a model in corporate finance that quantifies the required return on an asset based on its systematic risks. An asset's systematic risks are summarized by its beta, which captures the degree of co-movement between asset returns and market returns.
Answer and Explanation: 1
(a) A cross-sectional analysis or cross-sectional study is a type of research analysis performed on a population, or sub-set of a population at a...
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fromChapter 15 / Lesson 6
What is the Capital Asset Pricing Model? Learn the definition and formula of CAPM, the assumptions that CAPM uses, and its importance in finance. Also, study examples and uses of CAPM.