Really tough Finance pre-test question! Help! Due tomorrow =(

1) Develop the CAPM beginning with the assumptions—you do not have address each and every one. Make sure to denote which assumption is violated by the true probability distribution and what does this mean with regard to the model?

2) Describe what a dominant portfolio represents.

3) Explain how the market portfolio is identified in the presence of a risk-free asset.

4) Explain the capital market line and what trading opportunities this represents.

5) Explain the how Sharpe/Lintner/Mossinet al, came up with the CAPM, i.e. what was the insight that got them from the CML to the SML?

6)What is the main message of the CAPM model? Hint: It deals with risk and can be explained by Figure 10 in the notes.


Anything helps! This is so far above my head =(

Philroy55 said:

1) Develop the CAPM beginning with the assumptions—you do not have address each and every one. Make sure to denote which assumption is violated by the true probability distribution and what does this mean with regard to the model?

2) Describe what a dominant portfolio represents.

3) Explain how the market portfolio is identified in the presence of a risk-free asset.

4) Explain the capital market line and what trading opportunities this represents.

5) Explain the how Sharpe/Lintner/Mossinet al, came up with the CAPM, i.e. what was the insight that got them from the CML to the SML?

6)What is the main message of the CAPM model? Hint: It deals with risk and can be explained by Figure 10 in the notes.


Anything helps! This is so far above my head =(

Click to expand...

You do not have a book to find definitions?! What about Google?

Please share your work with us .

If you are stuck at the beginning tell us and we'll start with the definitions.

You need to read the rules of this forum. Please read the post titled "Read before Posting" at the following URL:

http://www.freemathhelp.com/forum/th...Before-Posting

I apologize =( I did not thoroughly read the rules as I've been going everywhere I could find to get help. I am stuck at the beginning.

Again, absolutely anything helps.

-Phil

Philroy55 said:

I am stuck at the beginning.

Again, absolutely anything helps.

Click to expand...

This assignment is asking you to write a paragraph or two explaining your understanding of what you've studied. If you really have no idea, then you probably need to conference immediately with your academic advisor. Somebody needs to figure out how you got to this point in the course without any of this information having been mentioned in class, let alone explained or illustrated in your textbook, and somebody may need to be fired. You may even be able to get your tuition refunded. (Obviously, we can't help you with any of this, let alone try to teach you a semester's or year's course in a simple forum posting.)

Good luck!