Empirical essay format

But others found a correlation and in turn criticized the assumptions made by Fama and French and the database they used (Weber, 2006, p. 85). One of the most important and often cited studies that support the CAPM was carried out by Black, Jensen and Scholes in 1972. The study came to the conclusion that a positive relationship between the beta and the average return exists. Unfortunately, the slope of the security market line was too flat to explain the empirical values. Furthermore, the empirical analysis indicated a risk-free rate that was higher than the actual one. This conclusion was supported by many other studies, . Blume and Friend (1973) and Fama and MacBeth (1973). (Fama & French, 2004, p. 32)

Empirical essay format

empirical essay format

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