🔴 UGLIEST, old but EASIEST CAPM Capital Asset Pricing Model, What is CAPM Explained (Skip to
OMG wow! I'm SHOCKED how easy clicked here MBAbull.com for CAPM or Capital Asset Pricing Model.
This is a model applied to indicate an investor's "expected return", or how much percentage profit a company investor ought to logically demand to be a "fair" return for making investments into a company.
mbabullshit.com/blog/2011/08/0...
To find this, yet another question can be queried: Just how much is the sound "decent" percentage % profit that a financier should probably receive if he invests in a business (having comparatively high risk) in contrast to putting his money in government bonds which might be regarded to be "risk free" and instead of putting his hard earned cash in the general share market presumed to offer "medium" risk?
Visibly, it is almost only "fair" that in fact the investor receives a gain higher compared to the government bond percentage (due to the reason that the solitary enterprise possesses higher risk). It's moreover only just that he should expect a return larger than the broad stock exchange yield, because the specific business enterprise has higher risk compared to the "medium risk" general stock market. So just as before,how much exactly should this investor fairly receive as a smallest expected return?
This is where the CAPM Model or Capital Asset Pricing Model comes in. The CAPM Formula includes all these variables simultaneously: riskiness of the individual firm depicted by its "beta", riskiness of the universal stock market, rate of interest a "risk free" government bond would give, as well as others... and then spits out an actual percent which your investor "should be allowed" to take for investing his or her hard earned money into this "riskier" single firm.
This particularly exact percent is known as the "expected return", given that it can be the yield that he should "expect" or require to obtain if he invests his hard earned cash into a specific firm. This precise percentage is known as the "cost of equity".
The CAPM Model or CAPM Formula looks something like this:
Expected Return =
Govt. Bond Rate + (Risk represented by "Beta")(General Stock Market Return --Govt. Bond Rate)
Utilizing this formula, you are able to see the theoretically exact rate of return theindividual business enterprise investor ought to reasonably expect for his or her investment, if the CAPM Model or Capital Asset Pricing Model is to be held. • 🔴 UGLIEST, old but EAS...
What is CAPM?
What is the Capital Asset Pricing Model?
Пікірлер: 207
The music was bullshit. But the lecture was really good.
save a lot of time and watch this at 2x speed
I love how you keep things simple and teach me like I'm a idiot. Your explanation of concepts are easier to understand then the text book.
@MBAbullshit
9 жыл бұрын
Glad you find it simple Sebastian Murphy
LOL l just love how you keep saying 'DO NOT PANIC' or 'IT'S NOT THAT HARD' thanks for doing this because Finance does scare me! l have an Investment Analysis final exam tomorrow and your videos are kind of saving my life. Heaven must be filled with people like you! Again thank you! Greetings all the way from Dubai ;)
@MBAbullshit
9 жыл бұрын
Glad you're not so scared in Dubai now Sabrina F. !
Just wanted to say Thank You for making these videos. I have a professor that's not very good at explaining things. You really made it easy to understand. I am a second year MBA student at Wheeling Jesuit University. Thanks again!
I have attention deficit disorder, which makes it hard for me to listen to my teacher's lectures. I came here to learn more about CAPM. I still found it hard to focus, because the video was too long; however, I was able to understand your lectures more, and it helped me get an A- in my exam. Thank you man.
"If you have at least some intelligence...then for sure you would choose..." hehe..
@MBAbullshit
10 жыл бұрын
pushkar dey hehe.. :)
Dude, I was about to give up on a dream of becoming a CFA. You brought me back. You are the best!
@MBAbullshit
3 жыл бұрын
Good luck in becoming a CFA!
Hey Rashmi, I'm here for the difficult learners as I myself was one too in the past. My focus is to make it "idiot-proof." There are a lot of other free tutorials around which go faster. Cheers!
Lol I was like ... WHY IS HE CIRCLING THE MEDIUM RISK BOX at 6:38, then you circled the right box :P
So underrated financial educational channel.
@MBAbullshit
2 жыл бұрын
Thankssss!
@andrewtee
2 жыл бұрын
@@MBAbullshit Mr. Blogger, probably you can start a new channel on stock valuation using all the formulas applied in your finance education channel? I bet you will get a tonnes more of subscribers...
CAPM has its shortcomings though. Beta only measures past volatility. It doesn't take into account the future potential and projected value. Beta's also set as a slope on a trend line. The individual points may differ.
@MBAbullshit
8 жыл бұрын
+Bob Shapiro CAPM has a LOT of shortcomings, as do all financial models
THANK YOU!!!! Love your vids! halirous and informative.
@MBAbullshit
Жыл бұрын
Glad you find them hilarious!
Thanks A Million. The videos been uploaded by you under “MBAbullshit” helped me a lot. Can’t do much, but at least thank you by writing up a comment. You are a great teacher….Honestly!!...Thanks again!!.....Keep Uploading!!……………Regards!............ Ishan Agarwal
@MBAbullshit
9 жыл бұрын
infinityfunbook Regards as well!
@ 2:16 I rewinded that part over and over laughing harder each time as I envisioned my graduate school finance professor watching this. I remember first learning this crap back in January this year thinking why the hell am I getting a masters in accounting and finance and not just accounting where it all makes sense? You definitely made my day (or night I should say) as I am sitting here struggling doing the homework as I do every week with this stupid finance class. Can't wait for this semester to be over. May 11th cannot come fast enough!!!
@MBAbullshit
8 жыл бұрын
+1JayVon LOL!!! Good luck on the 11th!
@1JayVon
8 жыл бұрын
MBAbullshitDotCom Well finished the course with an 89.8. Still have to take corporate finance in the fall but your video helped me master the CAPM formula to the point where I easily remembered it. Any recommended videos to prepare me for that? I watched one about the WACC formula and you definitely simplified that for me as well. Professor made it sound so damn complex when briefly reflecting on it.
Please Don't Go On Negative Comments. Those Who Know, will Definitely understand the excellency of your teaching genre. ....Great Job.
That was hilarious and really well presented.
Warren buffet, a trader, and an economist are on a desert island trying to value a stock. Buffet looks at a bunch of financial ratios and growth metrics from financial statements, and predicts the stock’s profitability and values the stock based on simple ratios like return on assets, return on equity, price to book value, and price to earnings, compares these to the stocks price and comes up with an intrinsic value and margin of safety. The trader looks at the ticker and, if it is going up and isn’t approaching some historical resistance, says “more than it is now. The economist says “assume we could predict the future....” .
"remove this complicated bullshit from your brain" lol.
@MBAbullshit
9 жыл бұрын
***** lol
Hello, I just found your channel today trying to make better sense of CAPM. I am a finance student and I will be looking up your other videos. You got a new subscriber. Thanks!
@MBAbullshit
9 жыл бұрын
+MrSupernova111 glad you found us!
Wow, thank GOD you loved it, Nilay! BTW, what's BMA?
you are literally the bomb... a beast of youtube that all finance lecturers must hate because you can explain what the have to say in 5 mis. love ii
That music blew my head off! But nice lecture/tutorial/bullshit LOL
@MBAbullshit
9 жыл бұрын
besi4133 Hope you got your head back on now! :p
thanks for the help on my homework and not making it so boring! :-) easy to follow and man I finally doggone understood it! all the reading in the world and I could not get it, watched the video and got it! kudos!
@shaimaqassem3284
8 жыл бұрын
ط
@MBAbullshit
8 жыл бұрын
+blessedone726 glad you finally understand it!
@TheVibeBandTV I received the beer in the package... thanks! LOL
Hey man you really made me laugh loud when you say ''if you have least some intelligence..then start to circling the wrong option'' its so funny. However This video is really really help me a lot than i sitting in the class. Thanks for sharing all these
@MBAbullshit
8 жыл бұрын
+Wei Xu LOL! glad it helped
I think it's the other way around. if the risk is high, you will require a high return. If the return is high but the risk is low, then it's a jackpot!
Wow! great to have a viewer all the way in Mauritius! Glad you had confidence in your exam!
bzw I did the f9 exam in acca last week.. watching your videos has boost my confidence+knowledge :) thanks from Mauritius
The general stock market is often represented by the SP500 (a basket of stocks from 500 reputed companies across different industries). If you invest in this basket of stocks (as opposed to an individual stock) your risk is lessened. Now compare that risk to a risk-free bank deposit (or govt bond) and a riskier individual stock.
the best sound effects!!!
@MBAbullshit
9 жыл бұрын
jeepnypitpits LOL
having a bit of an issue with capm no one at work or RO2/J10 have been able to help with - if CAPM is to find out the E(Ri), and is E(Ri)=[Rf+β(Rm-Rf)] and β=E(Ri)-Rf/E(Rm)-Rf, why do the CAPM if you already know E(Ri) which is needed to find β ????
ohh..thank you so much! it's more fun studying this with such a great teacher. :) high five!
I have been to class, being to various tutorial, and i never understood. 8 mins in the vid, it now makes sense. thank you so mch
you are doing a very good job with these videos.
@MBAbullshit
9 жыл бұрын
adventureboy78 hope you do a good job in your studies!
at 6:38 i almost questioned your intelligence
@MBAbullshit
7 жыл бұрын
haha "almost?" :p
you really gave me confidence in the first 3 min....thx alot
@MBAbullshit
7 жыл бұрын
glad to give you confidence!
So if you have a stock with a high dividend growth rate like CNI (17%) you might as well not bother investing in it because your required risk of return would have to be unrealistic,like 20%. Am I understanding this correctly?
GOOD STUFF you explain it how most professors would, if they didn't have egos
thanks for the video! like always, its clear and concise! thank you! you should publish books or something! I will definitely buy it!
@MBAbullshit
10 жыл бұрын
Thanks ninamikou , I do have ebooks on my site (both FREE and premium-for-sale choices). Check it out, cheers.
that funky music
Thanks for your videos. It helps us a lot. :)
@MBAbullshit
9 жыл бұрын
Sarita Fiuza glad to be of help!
Hello there I need some help here, really urgent. What's the difference between "risk adverse" and "risk averse"? Really appreciate anyone who can help!!
@MBAbullshit
10 жыл бұрын
v kim risk averse means to avoid risk. risk adverse means to fight risk. there are many ways to fight risk, and avoiding it is only one of them. for example, you might avoid a jewelry biz coz it risks robbery (risk aversion), or you might do the project but simply find ways to reduce the risk (hire a security guard for your shop)
Thanks a lot sir.i got clear concept about CAPM model.
@MBAbullshit
9 жыл бұрын
shahin islam glad the concept is clearer now for you!
Your videos are excelent, great job!
@MBAbullshit
10 жыл бұрын
dunick great thanks!
@Marshall: hope I don't explode (or implode!) LOL
u make things very way and I think it should be the way to teach such complex things. Thank you a lot for provding such excellent free Tutorials for us.
@bijoy glad you don't find it complex anymore
What the actual fuck actually slid out of my chair laughing 😂, that’s your music bed...an extremely wierd combination of discombobulated fart noises that drowns out your own voice levels!! I feel like this is an Elsa gate video... just jaw droppingly weird lol
@MBAbullshit
6 жыл бұрын
I did make it in bed... and those were indeed my "noises" ;)
Good explanation, but difficult to hear. Is there a volume control on the music?
Very helpful, thank you!
@MBAbullshit
8 жыл бұрын
+Xinran Yi very welcome, thanks too!
@Ming glad to know it help you. Cheers
I don`t think I made my question clear. In the DDM in the denominator where you have r-g sometimes you have to use the CAPM model to find your RRR. I have found however, that sometimes the RRR is lower than the Div.G.R , this is then useless because you would have a neg number in the denominator. So, I am asking if you have a stock with a high div.gr.rate% then you should you still use the DDM or not?
Thank you ! It helps more people every year. 🙏
@MBAbullshit
3 жыл бұрын
Happy to help!
the video is so cool, i got it thank you so much, teacher!!
@MBAbullshit
10 жыл бұрын
Glad you got it Gu Alan !
@gualan1642
10 жыл бұрын
i have one queston, please? could you explain "CAPM-M", PLEASE?
Good video. Really breaks it down.
@MBAbullshit
8 жыл бұрын
+3transporter hope you don't feel broken down with studies as much anymore
I cant find suitable words to say thanks Easy, smooth and helpful You are the best ;)
Hello Krizzy, you may want to check out my website where the full Beta video is one of my premium videos. Cheers!
Thank alot man, i was really panicking!
thank you for all your good accounting and financial vids. it really helps.
Thank you very much! I've been struggling with this for hours!
Glad I help you overcome your struggle!
I wish professors say bullshit during lectures. It works.
@MBAbullshit
4 жыл бұрын
Glad you enjoy the bull!
@lark glad you find it simple, cheers!
Thanks, it is very helpful!!
@MBAbullshit
6 жыл бұрын
glad you found it helpful!
why cant my lecturer do the lectures as fun as yours?? hahahaha..
thats cool! it is really helpful, thanks a lot.
you've explained the concept so well... thumbs up :)
I really need the brief history of CAPM! more like a video. That would cheer me up!
6:47 was damn funny when you yourself are about to choose the wrong one! :P
Great help as always thanks :-)
great video as always
Thanks Jorge!
Thanks Francis!
I love how you used the word bullshit. Professors tend to be too longwinded, descriptive, and too loquacious. I hate how they make simple things complicated.
Interesting to be called "hilarious" LOL!
LMFAO 2:20 LMFAO!!!
Great you you had a good 8 min.!
You really make finance stuff fun and interesting and I like it. You are a good teacher ^^
I did not do finance but i can debate with professors from the kmowledge i got from KZread..
@MBAbullshit
5 жыл бұрын
Good luck in your debates!
HAHAH! LOVE the sound effects!
Greatest find of 2018.
@mohannad your thanks is suitable!
the concept is awesome..i subscribed...just one suggestion..you seem to be trying too hard to explain..i mean you DO explain very well by the end of it, but the exact same result can be achieved in a smaller amount of time ..thanks!!
GREAT JOB TO MAKE IT SO EASY THIS BULLSHIT...SIR IF U HVE SAME VISUAL DEFENITION FOR FAMA AND FRENCH 3 FACTOR MODEL...KINDLY LET ME KNOW.........
Wow! What a great lecture.
@MBAbullshit
4 жыл бұрын
Glad you liked it!
really cool thanks a lot!
The awkward moment when you choose systematic risk over risk free...
Hai :) Good day!! I just want ask you regarding about your video talk about : Beta - Computing Simple Beta for CAPM (Preview) . Can you help to understand well the problems based in your videos. It is because I'm confused , where did you get the answer like (X-x) 1.8 ? why it is 1.8 ? why it is not 2.2 ? Huhuhu.. Please help me to understand that topic.. Thank you :) & GODBLESS
Hello can u do vdo on leverages
I don't remember it being this easy either! :)
Welcome!
Thank you for your help. The song was too loud
LOL I can fantasize about the paycheck til then. :p
@Misslelis: I love it when people like you love it :)
LOL
you know how to explain.lets talk about hedging the risk
thank you so much!!!
sir u r genius!!! and verry much talkative too :) pls don't make the vedio bullshit...
@MBAbullshit
8 жыл бұрын
+Sheikh Monjurul Islam sir, thanks again!
@Tommy hahahaha :)