Write 4 pages with APA style on Asset Pricing Issues. are likely to remain the subject of legitimate interest far into the future. In other words, they will continue to be useful in helping us underst

Write 4 pages with APA style on Asset Pricing Issues. are likely to remain the subject of legitimate interest far into the future. In other words, they will continue to be useful in helping us understand not just financial markets but also human behaviour and psychology. An example of the many issues facing researchers is the shape of the security market line which, according to the capital asset pricing model, reflects the most efficient portfolio that would give the best return for a certain level of risk. As recounted by Campbell (2000, 1528-29), changes in the slope of this line led to several hypotheses that were attempts to discover the patterns of behaviour of such data. Amongst the conclusions that continue to influence equity markets is that of the significant contribution that small firms make to market returns. The digitalisation of data and the increasing power of number-crunching computer technology in the last twenty-five years certainly helped not only in gathering data and improving its integrity, but also in the development of mathematical models that somehow helped explain the data.

Second, many models have been developed in response to the data.