pplpod29 Des 2025

The Price of Risk: Mastering the Capital Asset Pricing Model (CAPM)

How do investors determine if a potential return is worth the risk? In this episode, we deconstruct the Capital Asset Pricing Model (CAPM), a cornerstone of modern finance used to calculate the theoretically appropriate required rate of return for an asset. We explore how the model separates risk into two categories: "systematic risk" (market risk), which cannot be avoided, and "unsystematic risk," which can be eliminated through diversification.

Key topics covered in this episode:

The Power of Beta: Understanding how "beta" ($\beta$) measures an asset’s sensitivity to market movements and why high-beta stocks require higher discount rates.
The Security Market Line (SML): How to visualize risk versus return. We explain why assets plotted above the SML are considered "undervalued" and generate positive "alpha," while those below are seen as overvalued.
Founding Fathers: The Nobel Prize-winning origins of the model, developed independently by Treynor, Sharpe, Lintner, and Mossin.
Theory vs. Reality: Why the model remains popular for its simplicity despite failing numerous empirical tests. We discuss major critiques by economists Fama and French, the "low-volatility anomaly," and the unrealistic assumptions of a frictionless market.
Beyond the Basics: A look at the "Black CAPM" (Zero-beta CAPM), a robust alternative that removes the assumption of risk-free borrowing.

Join us to learn why rational investors should only expect to be rewarded for the risks they cannot diversify away.

Denne episoden er hentet fra en åpen RSS-feed og er ikke publisert av Podme. Den kan derfor inneholde annonser.

Episoder(8442)

Aespa: How K-Pop's Metaverse Group Conquered the Charts

Aespa turned a bold sci-fi avatar concept into one of K-pop's defining acts of the 2020s. Built by SM Entertainment and debuting in November 2020 with Black Mamba, the group of Karina, Giselle, Winter...

2 Jul 19min

Alanis Morissette and the Fury Behind Jagged Little Pill

Alanis Morissette went from being dubbed the Debbie Gibson of Canada, a synth-pop teen who opened for Vanilla Ice, to the queen of alt-rock angst behind a single album that sold over 33 million copies...

2 Jul 21min

Thank U, Next: How Grief Rewrote the Pop Rulebook

In late 2018, at the peak of her career, Ariana Grande's personal life shattered publicly. Rather than issue careful PR statements, she locked herself in a studio with friends and champagne and made a...

2 Jul 20min

Ariana Grande: From Rejected R&B Kid to Pop Mogul

At 14, Ariana Grande was laughed out of a Los Angeles boardroom for pitching a soulful R&B album. Years later she held the top three spots on the Billboard Hot 100 simultaneously, a feat untouched sin...

2 Jul 20min

Arlo Parks: The Cost of Comforting a Generation

Arlo Parks went from a teenager writing poems and listening to too much emo music to winning the Mercury Prize, touring with Billie Eilish, and co-writing for Beyonce. This deep dive traces her accele...

2 Jul 17min

Beabadoobee: The Misfit Who Escaped Her Viral Fame

Expelled from a strict Catholic school for misfit behavior, a teenager taught herself guitar from YouTube and uploaded a song as a joke under a gibberish Instagram name. Years later she was opening fo...

2 Jul 20min

Bebe Rexha: The Secret Hitmaker Who Claimed Her Voice

She wrote a Grammy-winning track for Eminem and Rihanna, penned K-pop hits, and shaped the sound of pop radio, yet could walk through a coffee shop unrecognized. This deep dive into Bebe Rexha examine...

2 Jul 17min

Beyonce's Cowboy Carter and the Reclaiming of Country

When Beyonce performed a country song at the 2016 CMA Awards, the response was to scrub the evidence and reject the song as not country enough. This deep dive into her 2024 landmark album Cowboy Carte...

2 Jul 17min