Study Regarding the Assets Evaluation on the Financial Market through the C.A.P.M. Model

  • Nicolae Balteș "Lucian Blaga" University of Sibiu
  • Alexandra Gabriela Maria Dragoe "Lucian Blaga" University of Sibiu
  • Doru Ioan Ardelean "Vasile Goldiș" Western University of Arad

Abstract

Capital Asset Pricing Model (CAPM) was introduced through the works of William Sharpe (1964), John Lintner (1965) and Jan Mossin (1966) based on the research of Henry Markovitz. Due to the independent formulation of the model by these three american researchers, there are in the literature references to the Security Market Line (SML) model of financial assets evaluation. CAPM model, revolutionized the financial theory, highlighting the link between the rentability of the individual securities and the rentability of the financial market. The first fundamental hypothesis of the model is that investors are concerned about the expected rentability closely related to the risk associated with it. Consequently, under equilibrium conditions of the financial market, the CAPM model highlights a linear relationship between the expected rentability of the portfolio and the amount of risk assumed by investors.

Published
2014-09-16
How to Cite
Balteș, N., Dragoe, A. G. M., & Ardelean, D. I. (2014). Study Regarding the Assets Evaluation on the Financial Market through the C.A.P.M. Model. Studia Universitatis Vasile Goldiș Arad, Seria Științe Economice, 24(3), 78-87. Retrieved from https://publicatii.uvvg.ro/index.php/studiaeconomia/article/view/270
Issue
Vol. 24 No. 3 (2014): Studia Universitatis "Vasile Goldiș" Arad - Economics Series
Section
Articles