CAPM Capital Asset Pricing Model in 4 Easy Steps - What is Capital Asset Pricing Model Explained

OMG wow! I'm SHOCKED how easy clicked here http://www.MBAbullshit.com for CAPM or Capital Asset Pricing Model. This is a model applied to indicate an investor's "expected return", or how much percentage profit a company investor ought to logically demand to be a "fair" return for making investments into a company. http://mbabullshit.com/blog/2011/08/06/capm-capital-asset-pricing-model/ To find this, yet another question can be queried: Just how much is the sound "decent" percentage % profit that a financier should probably receive if he invests in a business (having comparatively high risk) in contrast to putting his money in government bonds which might be regarded to be "risk free" and instead of putting his hard earned cash in the general share market presumed to offer "medium" risk? Visibly, it is almost only "fair" that in fact the investor receives a gain higher compared to the government bond percentage (due to the reason that the solitary enterprise possesses higher risk). It's moreover only just that he should expect a return larger than the broad stock exchange yield, because the specific business enterprise has higher risk compared to the "medium risk" general stock market. So just as before,how much exactly should this investor fairly receive as a smallest expected return? This is where the CAPM Model or Capital Asset Pricing Model comes in. The CAPM Formula includes all these variables simultaneously: riskiness of the individual firm depicted by its "beta", riskiness of the universal stock market, rate of interest a "risk free" government bond would give, as well as others... and then spits out an actual percent which your investor "should be allowed" to take for investing his or her hard earned money into this "riskier" single firm. This particularly exact percent is known as the "expected return", given that it can be the yield that he should "expect" or require to obtain if he invests his hard earned cash into a specific firm. This precise percentage is known as the "cost of equity". The CAPM Model or CAPM Formula looks something like this: Expected Return = Govt. Bond Rate + (Risk represented by "Beta")(General Stock Market Return --Govt. Bond Rate) Utilizing this formula, you are able to see the theoretically exact rate of return theindividual business enterprise investor ought to reasonably expect for his or her investment, if the CAPM Model or Capital Asset Pricing Model is to be held. http://www.youtube.com/watch?v=LWsEJYPSw0k What is CAPM? What is the Capital Asset Pricing Model?

Comments

1. at 6:38 i almost questioned your intelligence
2. AWESOOOMEEEE
3. thx for teach
4. you really gave me confidence in the first 3 min....thx alot
5. indeed quite a lot of bullshit in the video
6. thank you so much!!!
7. All i can say is you are a bullshit talkin' genius,the video is the best by the way.
8. that funky music
9. Just wanted to say Thank You for making these videos. I have a professor that's not very good at explaining things. You really made it easy to understand. I am a second year MBA student at Wheeling Jesuit University. Thanks again!
10. music?
11. @ 2:16 I rewinded that part over and over laughing harder each time as I envisioned my graduate school finance professor watching this. I remember first learning this crap back in January this year thinking why the hell am I getting a masters in accounting and finance and not just accounting where it all makes sense? You definitely made my day (or night I should say) as I am sitting here struggling doing the homework as I do every week with this stupid finance class. Can't wait for this semester to be over. May 11th cannot come fast enough!!!
12. Hey man you really made me laugh loud when you say ''if you have least some intelligence..then start to circling the wrong option'' its so funny. However This video is really really help me a lot than i sitting in the class. Thanks for sharing all these
13. thanks for the help on my homework and not making it so boring! :-) easy to follow and man I finally doggone understood it! all the reading in the world and I could not get it, watched the video and got it! kudos!
14. CAPM has its shortcomings though. Beta only measures past volatility. It doesn't take into account the future potential and projected value. Beta's also set as a slope on a trend line. The individual points may differ.
15. save a lot of time and watch this at 2x speed
16. sir u r genius!!! and verry much talkative too :) pls don't make the vedio bullshit...
17. Good video. Really breaks it down.
18. 7:12 looks like my testicles
19. "If you have at least some intelligence" :D
20. Super chafa tu video