Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
Series Vol. 55 , 01 December 2023
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A Review of the Applicability of Pricing Models in the Stock Market
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Abstract
The capital asset pricing model (CAPM) model has always been the core theory of asset pricing and is widely used in the world as a finance tool in the securities market, but it is not fully effective for the economic market due to the current state of development in some countries. This paper compares and analyses the CAPM model and its improved and alternative models based on existing literature and statistical data. This paper first explains the CAPM model, analyses its formula, and then describes the disadvantages and shortcomings of the CAPM model. Then it gives examples of other replaceable models, first explains those models, then lists the advantages of these models compared with the CAPM model as well as some of their shortcomings, and finally concludes through the comparison of these models to the CAPM model that although the CAPM model may not be applicable to the market in many cases, it can be replaced by other models, and even then there is no one-size-fits-all model that can replace all the market models, and conclusions need to be made on a case-by-case basis.
Keywords
CAPM, CCAPM, ICAPM, APT
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
- ISBN (Print)
- 978-1-83558-157-5
- ISBN (Online)
- 978-1-83558-158-2
- Published Date
- 01 December 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/55/20230976
- Copyright
- 01 December 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited