Dhruv
(Chartered Accountant)
(308 Points)
Replied 06 May 2011
I don't think that's correct, CAPM should not be confused with APT, basically APT is 'like' CAPM with more than 1 factor - there is a simple linear relationship.
The APT states that if asset returns follow a factor structure then the following relation exists between expected returns and the factor sensitivities:
vins@final
(ca_cwa final )
(93 Points)
Replied 06 May 2011
DHRUV n others r right, i know the below
ER=PR+UPR
ans::ER=9.25+8.15* =17.4
*UPR=sum of (beta*actual-expected)
vins@final
(ca_cwa final )
(93 Points)
Replied 06 May 2011
CAPM is mainly based beta factor
n APM/APT is based other economic factors and beta.
in the above
PR is predicted return i.e Rf
UPR is unpredicted return i.e. to be calculated by using those economic factors vch r effecting return..
CAclubindia
