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First Friday Book Synopsis

Bob''s blog entries CAPM model David l. Here is a brief excerpt from an article by David l. Pierce for the Wall Street Journal. You may have a college senior in your family or know one or more elsewhere. If so, I hope you will share it. To read the complete article, check out other resources, and obtain WSJ subscription information, please […].

Complimentary Resource – Change Is Constant: PMBOK Guide 5th Edition

Strategy Driven

Anyone contemplating pursuit of their PMP or CAPM certification within the next 12 months needs to know that both the PMP and CAPM examinations will change from dependence on the PMBOK Guide® Fourth Edition to focus on the PMBOK Guide® Fifth Edition on July 31, 2013.

Trending Sources

What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

Furthermore, few PE investors explicitly use the capital asset price model (CAPM) to determine a cost of capital. The private equity industry has grown markedly in the last 20 years and we know more than we used to about its effects on the economy.

Why Those Guys Won the Economics Nobels

Harvard Business Review

Back in the ‘60s, people developed the capital asset pricing model [CAPM] as a way to do that. And the theory that was available then was CAPM. So when Fama started, the cross-sectional model was the CAPM, and for the time series people just said well let’s just assume that risks don’t change over time, so whatever risk adjustment there is it’s the same today, tomorrow, and thereafter. But everybody still uses the method that came out of CAPM.

What the Great Fama-Shiller Debate Has Taught Us

Harvard Business Review

Early tests of CAPM came out reasonably well, and by the end of the 1970s Fama’s former student Michael Jensen was (in)famously declaring that “I believe there is no other proposition in economics which has more solid empirical evidence supporting it than the Efficient Market Hypothesis.”. But it’s just as valid to hold on to CAPM and label these effects market inefficiencies.