‘The Capital asset pricing model (CAPM) is a very useful model and it is used widely in the industry even though it is based on very strong assumptions. Discuss in the light of recent developments in the area.’

MN3365 STRATEGIC FINANCE

Essay title: MN3365 STRATEGIC FINANCE

‘The Capital asset pricing model (CAPM) is a very useful model and it is used widely in the industry even though it is based on very strong assumptions. Discuss in the light of recent developments in the area.’

1. Introduction
- How widely CAPM is used in the field, and its usefulness and assumptions. Mention how it is built up with what sorts of logic inside, and deficiencies it has, and says `this paper would describe how CAPM has been developed, supporting what it lacks of in the logic` 

2. Body 1 
Description about Fama-French 3 factor model. 
- How and when it has developed
- How it is different from CAPM 
- How it supports 

3. Body 2
Build-up Method 
- Same as above 

4. Body 3 
Extended CAPM 
- Same as above

5. Conclusion. 

Fama-French, Build-up Method, Extended CAPM to be organized in time order. Hope you can briefly mention about Behavioural Finance aspects in conclusion, like the way it explains the area Traditional Finance cannot cover. 

MN3365 STRATEGIC FINANCE