Cochrane (1991, 1996) created a production CAPM (PCAPM). How is the PCAPM different from the consumption CAPM

Question:

Cochrane (1991, 1996) created a production CAPM (PCAPM). How is the PCAPM different from the consumption CAPM (CCAPM)? He tested it using a single factor model. Write the equation for this model and discuss his results.

What did he conclude?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For answer-question

Investment Valuation And Asset Pricing Models And Methods

ISBN: 9783031167836

1st Edition

Authors: James W. Kolari, Seppo Pynnönen

See More Books

Question Posted: Mar 03, 2024 02:00 AM

See More Questions

"internet radios" for streaming audio, and personal video recorders and players. Describe design and evaluation processes that could be used by a start-up company to improve the usability of such...
CANMNMM January of this year. (a) Each item will be held in a record. Describe all the data structures that must refer to these records to implement the required functionality. Describe all the...
How is the WTO different from GATT? What functions is WTO expected to perform?
One joule of work is done on a system, raising its temperature by one degree centigrade. Can this increase in temperature be harnessed to do one joule of work? Explain.
Outlaw Bike Co. has determined that the proper balance for the Allowance for Doubtful Accounts at December 31 is $85,305. Assume that the allowance for doubtful accounts for Outlaw Bike Co. had a...
Use the option quote information on Ageas from Euronext Liffe shown here to answer the questions that follow. (a) Suppose you buy 20 contracts of the June 1.50 call option. How much will you pay,...
Petitioner Atlantic Marine Company was a contractor located in Virginia. It entered into a subcontract with J-Crew Management, Inc., a Texas corporation, that contained a forum-selection clause...
Revenues, production, and purchases budgets. The Suzuki Co. in Japan has a division that manufactures two-wheel motorcycles. Its budgeted sales for Model G in 2010 are 900,000 units. Suzukis target...
Suppose a company pays its regular wage for employees working up to 40 hours a week, and overtime pay 50% greater(time and a half) for hours worked over 40 hours. Assuming employe es have full...
Assume that we scale the market factor with an instrumental lagged variable denoted as I t1 . Write a conditional (time-varying) linear function for beta and define its terms. Assuming that the alpha...
Breeden (1979) specified a CCAPM that collapses the multi-beta Merton (1973) ICAPM into a single-beta equation. Write this model and define its variables and parameters. Why did he believe that the...
In 2018, the federal government spent $4.1 trillion and brought in revenue of $3.3 trillion. a. Is this a budget deficit or surplus, and what is its size? b. If net government debt in 2018 was $15.8...
Simple Simons Bakery purchases supplies on terms of 1.7/10, net 25. If Simple Simons chooses to take the discount offered, it must obtain a bank loan to meet its short-term financing needs. A local...
The Signet Corporation has issued four-month commercial paper with a $6.4 million face value. The firm netted $6,248,982 on the sale. What effective annual rate is Signet paying for these funds?
Magna Corporation has an issue of commercial paper with a face value of $1,060,000 and a maturity of six months. Magna received net proceeds of $1,032,186 when it sold the paper. What is the...
You own a put option on Oracle stock with an exercise price of $20 that expires today. Plot the value of this option as a function of the stock price.
Dynamic Energy Systems stock is currently trading for $39 per share. The stock pays no dividends. A one-year European put option on Dynamic with a strike price of $43 currently trading for $4.37. If...
A double-convex lens is to be made of glass with an index of refraction of 1.5. One surface is to have twice the radius of curvature of the other and the focal length is to be 60 mm. What is the (a)...
Discrete sample spaces: suppose there are N cable cars in San Francisco, numbered sequentially from 1 to N. You see a cable car at random; it is numbered 203. You wish to estimate N. (See Goodman,...
Looking back at Problem 12, suppose the call money rate is 5 percent and your broker charges you a spread of 1.25 percent over this rate. You hold the stock for six months and sell at a price of $65...
Repeat Problem 23 assuming you short the 800 shares on 60 percent margin. Data From Problem 23 You believe that Rose, Inc., stock is going to fall and youve decided to sell 800 shares short. If the...
You believe the stock in Freeze Frame Co. is going to fall, so you short 600 shares at a price of $72. The initial margin is 50 percent. Construct the equity balance sheet for the original trade. Now...
IFRS require the parts of PP&E with relatively significant costs to be depreciated separately. What is one challenge concerning this standard?
Prepare a master budget for the three months ending June 3 0 , 2 0 2 4 . Include the following budget schedules and financial statements: 1 ) Sales Budget by month and total for the quarter 2 )...
Product-Costing Accuracy, Plantwide and Departmental Rates, ABC Escuha Company produces two type of calculators: scientific and business. Both products pass through two producing departments. The...

Cochrane (1991, 1996) created a production CAPM (PCAPM). How is the PCAPM different from the consumption CAPM

Question:

Step by Step Answer:

Investment Valuation And Asset Pricing Models And Methods

Students also viewed these Business questions