What you SHOULD know about the CAPM

I realised, I simplified the Eugene Fama Paper a bit too much. He does not test Sharpe ratios- but the alphas in the factor models. But I have not talked about factor models in this course, so if you think in terms of Sharpe ratios, this gives you perfect intuition.
PAPER ON BEATING THE MARKET:
Fama, Eugene F., and Kenneth R. French. "Luck versus skill in the cross‐section of mutual fund returns." The journal of finance 65.5 (2010): 1915-1947.
MUSIC:
Aesthetics (pixabay.com/music/beats-aesth...)
Funky Teaser (pixabay.com/music/funk-funky-...)
Galaxy Echo (pixabay.com/music/beats-galax...)

[@yousefhashem2743]

Great job with these videos. Helped me greatly!

[@asgardro4434]

Great video like the others. So the CAPM can be used to assess the cost of equity of a firm, and the hurdle rate that the managers have to achieve in the investment they pursue in the firm right, given the risk of the firm? Could you make a video explanation of how the CAPM is useful to assess the cost of equity of a firm and what happens when the managers pursue investments that don't beat the cost of equity?