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Arbitrage Pricing, Capital Asset Pricing, and Agricultural Assets
Author(s) -
Arthur Louise M.,
Carter Colin A.,
Abizadeh Fay
Publication year - 1988
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242076
Subject(s) - arbitrage pricing theory , consumption based capital asset pricing model , investment theory , rational pricing , capital asset pricing model , arbitrage , economics , financial economics , security market line , capital asset , business , finance , paleontology , horse , stock market , biology
A new asset pricing model, the arbitrage pricing theory, has been developed as an alternative to the capital asset pricing model. The arbitrage pricing theory model is used to analyze the relationship between risk and return for agricultural assets. The major conclusion is that the arbitrage pricing theory results support previous capital asset pricing model findings that the estimated risk associated with agricultural assets is low. This conclusion is more robust for the arbitrage pricing theory application because it provides a better explanation of the relationship between risk and returns than does the capital asset pricing model.