Testing the Capital Asset Pricing Model And the Fama-French Three-Factor Model By Jiaxin Ling (Cindy) March 19‚ 2013 Key words: Asset Pricing‚ Statistical Methods‚ CAPM‚ Fama-French Three-Factor Model Abstract: This paper examines the Capital Asset Pricing Model(CAPM) and the Fama-French three-factor model(FF) and the Fama-MacBeth model(FM) for the 201211 CRSP database using monthly returns from 25 portfolios for 2 periods ---July 1931 to June 2012 and July 1631 to June 2012. The theory’s
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NETFLIX’S BUSINESS MODEL AND STRATEGY IN RENTING MOVIES AND TV EPISODES EXECUTIVE SUMMARY Netflix is the largest subscription service for sending DVD’s by mail and streaming movies and TV episodes over the internet. Netflix’s revenues grew from $500 million in 2004 to $519.8 million in 2010. Company’s net income increased from $21.6 million in 2004 to $141-156 million in 2010. It attracted 1.6 million subscribers in 2004 and had to 15 million subscribers by 2010. Reed Hastings founder
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Model T Article (from 1900’s point of view) Henry Ford’s Ford Motor Company produced the ‘Tin Lizzie’ or ‘Model T’ in September 1908. Compared to Ford’s previous models‚ Model T is by far the most popular and successful of all Ford car models. Even now‚ nineteen years after it was first produced in 1908‚ Model T’s are still a favorite amongst consumers. Not only is this model the finest of all Ford’s models‚ it is also one of the best models compared to all other car models
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Internet Business Models: “Pure-Play” versus “Bricks-and-Clicks” By Bin Wu For Dr. Conley GRW 500 February 16‚ 2013 Abstract The internet has become a necessary element of human being’s daily life. It is also a significant channel to do business in modern society. Due to advantages of internet business‚ the transactions have become easier than before. According to the analysis of “Pure-Play” internet business model and “Bricks-and-Clicks” business model‚ both of these
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The popularity of America’s next top model Case introduction America’s Next Top Model (often shortened to Top Model or abbreviated as ANTM) is a reality television show in which a number of women compete for the title of America’s Next Top Model and a chance to start their career in the modeling industry. The show was created and is hosted by former talk-show host and model Tyra Banks‚ who also serves as the head judge and executive producer of the show. The first "cycle" premiered in May 2003
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paper has argued that to claim whether the CAPM is dead or alive‚ some improvements on the model must be considered. Rather than take the view that one theory is right and the other is wrong‚ it is probably more accurate to say that each applies in somewhat different circumstances (assumptions). Finally it’s argued that even the examination of the CAPM’s variants is unable to solve the debate into the model. Rather than asserting the death or the survival of the CAPM‚ we conclude that there is no
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Chapter 10 Arbitrage Pricing Theory and Multifactor Models of Risk and Return Multiple Choice Questions 1. ___________ a relationship between expected return and risk. A. APT stipulates B. CAPM stipulates C. Both CAPM and APT stipulate D. Neither CAPM nor APT stipulate E. No pricing model has found Both models attempt to explain asset pricing based on risk/return relationships. Difficulty: Easy 2. ___________ a relationship between expected return and risk. A. APT stipulates
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calculation for debt. Nike’s total interest expense was $58.7 million‚ so their cost of debt was found to be 4.3%. Joanna used a tax rate of 38% in her calculations‚ making Nike’s cost of debt after tax to be 2.7%. Joanna decided to use the CAPM model in her calculation of Nike’s cost of equity. She used the risk-free rate of 5.74% on a 20-year Treasury bond‚ the geometric mean for market risk premium from 1929 to 1999 which was 5.9%‚ and Nike’s average beta from 1996 to 2001‚ which was 0.80 to
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Baddeley and Hitch (1974) developed an alternative model of short-term memory which they called the working memory model. The working memory model consists of four components. The central executive which controls and co-ordinates the operation of two subsystems‚ the phonological loop and the visuo-spatial sketchpad. The central executive controls attention and coordinates the actions of the other components‚ it can briefly store information‚ but has a limited capacity. The phonological loop consists
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Fama-French Three-Factor Model Capital Marketing Shijie Wu Fama-French Three-Factor Asset Pricing Model I. Definition of Fama-French Three-Factor Model A. Definition In asset pricing and portfolio management‚ the Fama-French three-factor model is a theory that improvement of the capital asset pricing model. The model is proposed based on the empirical study of historical returns as a result of U.S. stock market. The purpose is to explain the average returns of the stock
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