Advances in Economics, Management and Political Sciences
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Proceedings of the 3rd International Conference on Business and Policy Studies
Series Vol. 67 , 05 January 2024
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The Application of the Capital Asset Pricing Model (CAPM) in China's Financial Market: An Analysis of Regulatory Impact and International Comparison
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Abstract
As the world's second largest economy, China is also one of the world's biggest emerging economies. The Capital Asset Pricing Model (CAPM) is one of the most classic pricing models, and China's asset pricing model has gained a lot of experience from it. This research investigates the application of the CAPM in China's financial market, focusing on the influence of financial market regulation and conducting a comparative analysis with international markets. CAPM is a fundamental asset pricing model used to estimate asset expected returns and risks based on their covariance with the overall market portfolio. The study aims to analyze the practical implementation of CAPM in China's financial market, considering the impact of financial market regulation on the model's effectiveness. Key variables such as market data, risk-free rates, and stock returns are utilized, with specific adjustments made to accommodate China's unique regulatory environment. The research's significance lies in providing valuable insights into asset pricing and risk assessment in China's financial market, as well as implications for investors and policymakers. By comparing the results with international markets, this study contributes to a broader understanding of the CAPM model's applicability and effectiveness in diverse regulatory settings.
Keywords
Capital Asset Pricing Model (CAPM), financial market regulation, China's financial market, international markets
References
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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 3rd International Conference on Business and Policy Studies
- ISBN (Print)
- 978-1-83558-265-7
- ISBN (Online)
- 978-1-83558-266-4
- Published Date
- 05 January 2024
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/67/20241253
- Copyright
- 05 January 2024
- 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