Excellent analysis, thanks! 👌 Just a small off-topic question: 😅 I have a set of words 🤷♂️. (behave today finger ski upon boy assault summer exhaust beauty stereo over). What should I do with this? 🤷♂️
I really appreciate your efforts! I need some advice: My OKX wallet holds some USDT, and I have the seed phrase. (air carpet target dish off jeans toilet sweet piano spoil fruit essay). Could you explain how to move them to Binance?
i really dont get how to compute 7.75+5bi1+3.75bi2 ,sorry. can you please do a solution for this one? base on this one 15 = a + 1.0 bi1 +.6 bi2 14 = a + .5 bi1 + 1.0 bi2 10 = a + .3 bi1 + .2 bi2 i still dont get it. sorry
Actually it is always the alpha that confuses me some say that alpha in the formula using the total return (i.e. CAPM model) equals alpha in APT x rf(1-beta) would you mind explaining it?
Set up the equations 15 = a + 1.0 bi1 +.6 bi2 14 = a + .5 bi1 + 1.0 bi2 10 = a + .3 bi1 + .2 bi2 You have 3 equations and 3 unknowns, a, bi1 and bi2. It's just an algebra problem. One way to do it is to take one of the equations and solve for "a" a = 10 - .3 bi1 - .2 bi2 substitute this into the other equations to eliminate "a" Now you have 2 equations and 2 unknowns. You can eliminate the second unknown by taking the first equation with "a" substituted in and multiplying it by 2 and subtracting the second equation from it. You'll be left with bi1 and one equation. Once you get that value, substitute it in to the equation to get bi2.
Will Candu This is an equilibrium pricing equation that says that the expected return is determined by the risk free rate and the systematic risk factors bi1, bi2. In the CAPM only beta differed for each stock. The risk free rate and the market risk premium were the same for all stocks. If an asset is priced correctly it should lie on the security market line. Here, all assets if priced correctly should lie on the plane. So if each asset had it's own alpha then we don't have an equilibrium pricing model.
Ronald Moy So, is the alpha that appears in the apt model the same is just the risk-free rate, or the intercept/constant of the APT model could be anything (i.e. E(ri), alpha, risk-free rate, zero-beta rate) that forms the model? thank you so much for answering
"Now I'm not gonna do it here, but you can work that out..." Nice! Why not just have us read our books by ourselves then? What's the whole point of this nonsense you call a tutorial then. DISLIKE
Set up the equations 15 = a + 1.0 bi1 +.6 bi2 14 = a + .5 bi1 + 1.0 bi2 10 = a + .3 bi1 + .2 bi2 You have 3 equations and 3 unknowns, a, bi1 and bi2. It's just an algebra problem. One way to do it is to take one of the equations and solve for "a" a = 10 - .3 bi1 - .2 bi2 substitute this into the other equations to eliminate "a" Now you have 2 equations and 2 unknowns. You can eliminate the second unknown by taking the first equation with "a" substituted in and multiplying it by 2 and subtracting the second equation from it. You'll be left with bi1 and one equation. Once you get that value, substitute it in to the equation to get bi2.
Excellent analysis, thanks! 👌 Just a small off-topic question: 😅 I have a set of words 🤷♂️. (behave today finger ski upon boy assault summer exhaust beauty stereo over). What should I do with this? 🤷♂️
I really appreciate your efforts! I need some advice: My OKX wallet holds some USDT, and I have the seed phrase. (air carpet target dish off jeans toilet sweet piano spoil fruit essay). Could you explain how to move them to Binance?
the author dose not seem to distinguish E(f_i), the expectation of factor i, and E (R_i), expectation of i-th stock
@9:35 why did we set lamda 1 equal to 1?
i really dont get how to compute 7.75+5bi1+3.75bi2 ,sorry. can you please do a solution for this one? base on this one
15 = a + 1.0 bi1 +.6 bi2
14 = a + .5 bi1 + 1.0 bi2
10 = a + .3 bi1 + .2 bi2
i still dont get it. sorry
If you look down at the comment to ho duc ninh I went over the explanation. See if that helps.
three equations three unknowns. See this..probably you read in your 9th grade but forgot :) www.themathpage.com/alg/simultaneous-equations-3.htm
Actually it is always the alpha that confuses me
some say that alpha in the formula using the total return (i.e. CAPM model) equals alpha in APT x rf(1-beta)
would you mind explaining it?
How did you calculate the number 7.75 , 5 ,3.75 ?. thank you.
Set up the equations 15 = a + 1.0 bi1 +.6 bi2
14 = a + .5 bi1 + 1.0 bi2
10 = a + .3 bi1 + .2 bi2
You have 3 equations and 3 unknowns, a, bi1 and bi2. It's just an algebra problem. One way to do it is to take one of the equations and solve for "a"
a = 10 - .3 bi1 - .2 bi2
substitute this into the other equations to eliminate "a" Now you have 2 equations and 2 unknowns. You can eliminate the second unknown by taking the first equation with "a" substituted in and multiplying it by 2 and subtracting the second equation from it. You'll be left with bi1 and one equation. Once you get that value, substitute it in to the equation to get bi2.
Ronald Moy i understood now.Thank you so much.
can you do a solution please?
Can you please work out the formula. Like how did u get these numbers 7.75+5bi1+3.75bi2. Thank you
+Tasnim Ibrahim If you look down at the comment to ho duc ninh I went over the explanation. See if that helps.
+Ronald Moy Great thank you
I want to ask why the alpha is a constant as each security should have its own alpha from CAPM?
Will Candu This is an equilibrium pricing equation that says that the expected return is determined by the risk free rate and the systematic risk factors bi1, bi2. In the CAPM only beta differed for each stock. The risk free rate and the market risk premium were the same for all stocks. If an asset is priced correctly it should lie on the security market line. Here, all assets if priced correctly should lie on the plane. So if each asset had it's own alpha then we don't have an equilibrium pricing model.
Ronald Moy So, is the alpha that appears in the apt model the same is just the risk-free rate, or the intercept/constant of the APT model could be anything (i.e. E(ri), alpha, risk-free rate, zero-beta rate) that forms the model? thank you so much for answering
@@WCyoyoyo Ronald moy....any answer in this question??
bad video
"Now I'm not gonna do it here, but you can work that out..." Nice! Why not just have us read our books by ourselves then? What's the whole point of this nonsense you call a tutorial then. DISLIKE
Oh. My. God.
It's a 3x3 system of linear equations. 3 variables. 3 unknowns. You need to be watching Sesame Street, not APT videos.
sir please, can you do a solution?
The solution and explanation is somewhere in the comments
Set up the equations 15 = a + 1.0 bi1 +.6 bi2
14 = a + .5 bi1 + 1.0 bi2
10 = a + .3 bi1 + .2 bi2
You have 3 equations and 3 unknowns, a, bi1 and bi2. It's just an
algebra problem. One way to do it is to take one of the equations and
solve for "a"
a = 10 - .3 bi1 - .2 bi2
substitute this into the other equations to eliminate "a" Now you have 2
equations and 2 unknowns. You can eliminate the second unknown by
taking the first equation with "a" substituted in and multiplying it by 2
and subtracting the second equation from it. You'll be left with bi1
and one equation. Once you get that value, substitute it in to the
equation to get bi2.
This is a bad video...