Analyst‚ Jeffrey Bruner‚ uses the Capital Asset Pricing Model (CAPM) to help identify mispriced securities. However‚ a consultant suggests Bruner to use Arbitrage Pricing Theory (APT) instead. As the following‚ it will mention the role of CAPM in the modern portfolio management; to clarify the APT faction and explain the reasons why should Bruner use APT to help identify mispriced securities. In modern portfolio management‚ the role of Capital Asset Pricing Model (CAPM) is a model that attempts to describe
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1. The Malaysian Domestic Airline Industry In Peninsular Malaysia‚ the main cities are served by an efficient network of highways and major roads. In most cities and big towns‚ the road network is relatively good‚ with the exception being the less-developed rural and interior areas. Here‚ possibly the only way to get around would be by river transportation. A good and reliable train service runs the length of the Peninsula and covers the West and East Coast. The rail network also links up with Singapore
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Case Analysis - Atlantic Computer – A bundle of pricing options Introduction – Atlantic computer is the largest player in the hi-tech IT hardware industry and a major player in the server market. Based on the fast growth of the internet and with it the proliferation of corporate websites and file sharing systems‚ huge demand is predicted in the basic server segment market over the next few years. In order to make the most of this opportunity‚ Atlantic has come put with a new product called Tronn
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Compare and contrast CAPM and APT? Capital asset pricing model (CAPM) and arbitrage pricing theory (APT) are both methods of assessing an investment’s risk in relation to its potential reward and whether the potential investment yield is worthwhile. CAPM developed by Sharpe 1964. The basic theory behind this model is that investor needs to be compensated for Time Value of Money and the risk that they are taking. The time value of money is represented by the risk-free (rf) rate in
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common factors. While several macroeconomic variables do have some relationship with different risky assets‚ the APT postulates that the pricing of risky assets depends only on the set of variables whose influence is felt significantly by all risky assets together. This set of variables is known as the common factors of the APT.” (Otuteye 1998) An arbitrage pricing theory is basically a theory that is copied from an issue model‚ using alteration or expansion and arbitrage arguments. This theory explains
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Deceptive Advertising Description of the content area This paper seeks to examine ethics and deceptive advertisement and their inter-relatedness and its importance in the practices of corporations. The weakness of ethical practices within organization in recent times has become a pressing need for corporation if they are to effectively address the frequent occurrences or unethical and sometimes illegal practices. This paper further addresses and analyses and discuss the issues that surrounds
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Recognizing Deceptive Arguments Exercise Carol L. Gaskins HSM/210 March 16‚ 2012 Professor Constance Reiss Harvey Recognizing Deceptive Arguments Exercise 1. The Supreme Court has a greater obligation to protect the rights of victims rather than those of criminals. Answer: b (categorical statements) 2. It is clear to every intelligent person that the Eighth Amendment to the U.S. Constitution‚ protection against cruel and unusual punishment‚ does not bar the use of victim impact
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Appearances can be Deceptive Meeting people for the first time we always tend on making a judgment based on their appearances. Appearances are really deceptive‚ The shimmering surface of a lake glowing in the evening sun‚ may inspire and be liked by us with its beauty. But hidden beneath its surface may be lying an ugly blanket of toxic waste. On the other hand‚ spilled waste of a tanker in the middle of an ocean can hide beneath it a beautiful life. Some people even judge someone to be intellectually
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Deceptive appearance People‚ often are able to put illusions into someone’s head‚ which can manipulate how they think and this affects the person’s judgment on what is reality. Illusions can be mistaken as being reality‚ very often there is a person making another person believe in the illusion and this creates a deceptive appearance. Throughout the play‚ “Othello”‚ by William Shakespeare‚ the characters are seen to be blinded by love and manipulated by words. The play is also built on false friendship
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P roc. Natl. Acad. Sci. USA Vol. 94‚ pp. 4229–4232‚ April 1997 Economic Sciences The capital-asset-pricing model and arbitrage pricing theory: A unification M. A LI K HAN* AND YENENG SUN†‡ *Department of Economics‚ Johns Hopkins University‚ Baltimore‚ MD 21218; †Department of Mathematics‚ National University of Singapore‚ Singapore 119260; and ‡Cowles Foundation‚ Yale University‚ New Haven‚ CT 06520 Communicated by Paul A. Samuelson‚ Massachusetts Institute of Technology‚ Cambridge
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