STRATEGIC CORPORATE FINANCE

Strategic Corporate Finance



Strategic Corporate Finance

CAPM, personal investment decisions

No, CAPM model cannot be sued for personal investment decisions. First of all, the reason is that this and other business model is used by large companies who have fixed assets and capital structure. The CAPM model is used, by the professional to take decisions related to the market. This model gives the indication for what would be expected in terms of risk free rate of return, beta and market returns. Beta only measures the non-diversifiable or market risk which is only a part of the risk. CAPM model works in ...