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How are CAPM, the Fama-French model and APT? Which is more useful to the small investor...

How are CAPM, the Fama-French model and APT? Which is more useful to the small investor and why?

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CAPM Model is more useful for small Investors. Although some of its assumption might not be applicable in real world but still calculating rate of return based on CAPM model is more easy. If any security historic pric is available, it's beta can be calculated by regressing the stock price and risk free rate from the treasury bills can taken. Similarly market return can be taken with reference to any major Index. It is more easier for a small Investor to compute the required values in CAPM model than other models.

jeff jeffy answered 4 months ago
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