The Capital asset pricing model (CAPM) is a very useful model and it is used widely in the industry even though it is based on very strong assumptions. Discuss in the light of recent developments in the area.

Basic Rules for completing the course work: Please stick to the rules below when you draft the course work. 1. The course work should be a minimum of 2,000 and should NOT exceed 2,500 words. Make sure you are within the word limit 2. The coursework should be type-written. 3. Font Size: MINIMUM 12PT. You can use larger font for headings but not for the document. 4. Paragraphs should be DOUBLE SPACED! 5. Use references from published work, i.e. books and more importantly academic journals (especially if you want a 2.1 or 1st class mark). Using only books may give you a passing mark. Using only websites may not even give you the passing mark. 6. Be careful when you use sources (i.e. journals/books/websites) to refer to them in the document. Best way is through the use of footnotes where you write the name of the first author, the year of publication and the relevant pages you borrowed the saying or paragraph from. You need to do that even if you only used a word from someones work. You cannot present other peoples work as your own. Doing that, will be plagiarism, which is a serious offence, taken very seriously by the College and may lead to failing the course or even your degree! 7. There is nothing wrong in using other peoples work as long as you refer to it. The more ideas you use, the better for you (regarding your mark) since it shows you are aware of the main literature/ideas out there! However, make sure that you also write your own thoughts! I know what other people saywhat I am interested to read is what you think (and why) about this! Soblend information from other sources with your own work. 8. For the case study part answer all the points listed in the case study. 9. The essay part should have the following elements: a. Introduction: here you briefly explain what the essay is about and how you intend to approach the issue – what follows in the essay. b. Main concepts behind the problem and discussion: Here you have the opportunity to present the main theory behind the question, the main ideas, or the whole debate. Then (or along the presentation) you should express your own views, linking them with the other researchers and debate views/elements. In this part you can get very creative, but make sure the above are definitely included! c. Conclusions: here you say what the essays purpose was and sum up all your arguments (made in section B above) in order to highlight the fact that you have addressed the main issues concerned with the essay question. d. References: Here you should list in Ascending alphabetical order ALL the references you have used or referred to in the document. Please see published papers on the style of presenting references (they are always included at the end of journal papers) and stick with a style. I would suggest the style used in the papers published in the Journal of Finance. Marking Please see the Assessment Rubric in the last page Useful papers: Ang, A., R.J Hodrick, Y. Xing and X. Zhang (2006) The cross section volatility and Expected Returns, The Journal of Finance, 61, 1, 259 – 299 Banz, R (1981) The Relation between Return and Market Values of Common Stock, Journal of Financial Economics, 9, 3-18 Berk, J.B (1995) A Critique of Size Related Anomalies, Review of Financial Studies, 8, 275-286 Fama, E. F. and K.R.French (2012) Size, Value, and Momentum in International Stock Returns, Journal of Financial Economics, 105, 3, 457 – 472 Fama, E. F. and K.R.French (2006) The value premium of CAPM, The Journal of Finance, 61, 5, 2163 – 2185 Fama, E & French, K (1993) Common Risk Factors in the Returns on Stocks and Bonds, Journal of Financial Economics, 33, 3-56 Fama, E & Macbeth, J (1973) Risk Return and Equilibrium: Some Empirical Tests, Journal of Political Economy, 8, 607-636 Graham, J &Harvey, C (2001) The Theory and Practice of Corporate Finance: Evidence From The Field, Journal Of Financial Economics 60, 187-243 Kothari Et Al. (1995) Another Look at the Cross Section of Expected Stock Returns, Journal of Finance, 50, 185-224 Lewellen, J and S. Nagel (2006) The conditional CAPM Does not Explain Asset Pricing Anomalies, The Journal of Financial Economics, 82, 2, 289 314. Roll, R (1977) A Critique of the Asset Pricing Theorys Test, Journal of Financial Economics, 4, 129-176 Sharpe, W.F (1964) Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk, Journal of Finance 19, 425-442 Handbook of Investors Behavior during Financial Crises Edited by Fotini Economou, Konstantinos Gavriilidis, Greg N. Gregoriou and Vasileios Kallinterakis, Academic Press, 2017 (available in the library)