Arbitrage Pricing, Capital Asset Pricing, and Agricultural Assets
American Journal of Agricultural Economics1988Vol. 70(2), pp. 359–365
Citations Over TimeTop 18% of 1988 papers
Abstract
Abstract 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.
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