The traditional literature on the CAPM assumes that investor's tax payments simply vanish from the model. This assumption is not at all consistent with the actual behavior of the Treasury. The theory of general equilibrium states that an interest rate rf = 0 will not affect prices if taxes are...

The traditional literature on the CAPM assumes that investor's tax payments simply vanish from themodel. This assumption is not at all consistent with the actual behavior of the Treasury. The theoryof general equilibrium states that an interest rate rf = 0 will not affect prices if taxes are...

The traditional literature on the CAPM assumes that investor's tax payments simply vanish from the model. This assumption is not at all consistent with the actual behavior of the Treasury. The theory of general equilibrium states that an interest rate rf = 0 will not affect prices if taxes are...