New asset pricing models revolutionize security analysis and investment strategies.
The article reviews different models used to price assets and analyze securities. It discusses the Capital Asset Pricing Model (CAPM) and its variations, like the Conditional CAPM and the Arbitrage Pricing Theory. These models help understand how expected returns on investments change over time and in different business conditions. Researchers have found that these models provide valuable insights into how assets are priced and how investors can make informed decisions.