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A inquiry about consumption capital asset pricing model - cCAPM
Posted 23 September, 2009 by Shania Colin Head from Anchorage, United Statesmy name is Shania from Anchorage, United States. Though i ain't new at all this forex trading business, i have a question for you regarding a term i didn't understand: what does consumption capital asset pricing model - cCAPM mean?FX Sage Answers:That is a juicy subject. Consumption capital asset pricing model - cCAPM is A financial model that extends the concepts of the capital asset pricing model (CAPM) to include the amount that an individual or firm wishes to consume in the future. The CCAPM uses consumption measures, in terms of a consumption beta, in its calculation of a given investment's expected return. To illustrate: In its simplest form, the CCAPM differs from the CAPM by only the beta coefficient used in the calculation. The beta for consumption attempts to measure the covariance between an investor's ability to consume goods and services from investments, and the return from a market index. In practice, the CCAPM is used less frequently than the CAPM, and should probably only be used on a theoretical basis.Go to
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