Date of Defense
1984
Department
Finance and Commercial Law
Abstract
The concept of risk and uncertainty has been accepted for so long as a dominant all-encompassing factor in the financial world that no one questions the validity of the need to consider risk in all financial undertakings. It is risk and uncertainty that determines the price of a security, the rate of return that an investor demands from a security, the rate at which the investor discounts his investments and the general level of interest rates that affects the entire economy. It is surprising — with the idea of risk being so important — that it was only in relatively recent years, in the 1950s1, that the first concrete theory was put forth as to what constitutes risk and how to measure risk. Before this time, risk was just some notion that must be kept in the minds of the students, academicians and practitioners. This paper was based on the Capital Asset Pricing Model: a model that developed from that first concrete theory on risk that was put forth by Harry Markowitz in 1952[14],
Recommended Citation
Yim, Munyee, "The Capital Asset Pricing Model and its Application Using Two Markets" (1984). Honors Theses. 2082.
https://scholarworks.wmich.edu/honors_theses/2082
Access Setting
Honors Thesis-Campus Only