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2020-12-29 07:30:31
SHARPE, William Forsyth
Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk,' pp. 425-442 in: The Journal of Finance, Vol. 19, No. 3, September 1964
Blackwell Publishing for the American Finance Association, Oxford, 1964. THE CAPITAL ASSET PRICING MODEL - SIGNED. First edition, journal issue in original printed wrappers, inscribed by Sharpe, of the first presentation of his Capital Asset Pricing Model (CAPM) - the most famous and influential pricing relation that has ever been discovered. Sharpe won the Nobel Memorial Prize in Economic Sciences 1990 for this work. Sharpe's capital asset pricing model states that the risk premium of an asset is equal to the asset's exposure to market risk (beta) times the risk premium of the market. As of today, the CAPM has been taught in business schools for more than fifty years, and it is commonly used by practitioners and investors to compute the cost of capital and to build investment strategies. In addition to Sharpe's signature he also added the equation for the CAPM and for a stock's 'beta'. "The CAPM was highly appealing from the theoretical point of view. It was the first general-equilibrium model of a market that admitted testing with econometric tools" (Focardi & Fabozzi, p. 87). The CAPM, which is based on earlier work by Markowitz on portfolio theory, is "a financial model that explains how securities prices reflect potential risks and returns. Sharpe's theory showed that the market pricing of risky assets enabled them to fit into an investor's portfolio because they could be combined with less-risky investments. His theories led to the concept of 'beta,' a measurement of portfolio risk. Investment analysts frequently use a beta coefficient to compare the risk of one stock … [Click Below for Full Description]
Bookseller: SOPHIA RARE BOOKS [Koebenhavn V, Denmark]
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