NMSU Business Outlook: September 2010

CAPM vs The Fama-French Asset Return Model

G. Raghuram, Quantitative Analyst, Zacks Research Pvt. Ltd, India, and former NMSU Graduate Student; and Chris Erickson

The work horse model of asset pricing, taught in nearly every undergraduate introductory finance course is the Capital Asset Pricing Model (CAPM). The beauty of this model is that it captures in a single elegant equation the relationship between the return on an asset and market risk. The problem is that CAPM doesn’t work well in actual practice.

Complete Article: CAPM vs The Fama-French Asset Return Model

Macroeconomic Stabilization and Growing the Private Sector

Christopher A. Erickson

American Recovery and Reinvestment Act (ARRA)—the socalled Obama Stimulus Package—has generated considerable controversy as to its impact on the economy. Supporters of ARRA have argued that the program was critical in avoiding a more severe recession.

Complete Article: Macroeconomic Stabilization and Growing the Private Sector

Talking Points

Christopher A. Erickson and James Libbin

Complete Article: Talking Points


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