Timeline for Expected vs required return in valuation
Current License: CC BY-SA 4.0
6 events
| when toggle format | what | by | license | comment | |
|---|---|---|---|---|---|
| Dec 2, 2022 at 10:52 | vote | accept | shenflow | ||
| Dec 2, 2022 at 10:36 | comment | added | 1muflon1 | @shenflow also by the way CAPM is not necessary correct model that people believe in. But if inside of your mathematical model you say that all people take it as a fact then yes it would be their expected rate of return | |
| Dec 2, 2022 at 10:33 | comment | added | 1muflon1 | @shenflow the expected rate of return can be negative if supply and demand for funds intersect in II quadrant. Its the same as price of futures of oil that was temporary negative. There is a lot of empirical evidence for rare but real negative interest rates that are still accepted by investors | |
| Dec 2, 2022 at 10:28 | comment | added | shenflow | And the expected return derived via CAPM being negative would imply that the required return is negative (assuming that the CAPM holds). Correct? I can not really wrap my head around negative required returns making sense when I expect the respective asset to yield a negative return. | |
| S Dec 1, 2022 at 22:00 | review | First answers | |||
| Dec 2, 2022 at 6:22 | |||||
| S Dec 1, 2022 at 22:00 | history | answered | 1muflon1 | CC BY-SA 4.0 |