CAPM has come a long way, has passed the time-test, and is fast coming out as a winner despite the onslaught of both, APT and multi-factor CAPM. The bottom line is that CAPM is needed, dead or alive. If so, it does not mean that CAPM stays as, “CAPM." Downside risk in recent times has caught...

The Capital Asset Pricing Model allows to price risky financial assets, in seductive simple way, but under various theoretical assumptions. Since its inception, CAPM has been questioned due to some of its unrealistic theoretical assumption or due to its empirical failures. Academicians have been...

Sharpe's (1964) Capital Asset Pricing Model (CAPM) assumes that the relationship between risk and return is positive, linear and significant. However, it is not free from controversies and one of them advocates replacing CAPM's beta by downside beta based on investors' preference of downside...