How persuasive do you find Kilbourne’s article? Explain.
Which examples or explanation from each stood out to you most , and why?
Mention and examples from advertising or media in general (movies, tv, music) that you think reflect her points, and explain how your example(s)?
Sample Solution
better known as CAPM, for its name in English (Capital Asset Pricing Model), was developed by Sharpe (1964) and Litner (1965). Both based their studies on research conducted by Markowitz and Tobin (1960), who affi rmed that all investors select their portfolios through the mean-variance criterion. The objective is quantified car model and interpret the relationship between risk and return because through this linear relationship can establish the balance of the financial markets. Like any economic model, the CAPM based its relevance more or less restrictive assumptions, which have enabled it to draw conclusions universally accepted. According to Sharpe (1964), the basic assumptions on which is built the CAPM are: a) It is a static model, that is, there is only one period in which the assets are traded or exchanged at the beginning of the period and consumption takes place at the end of it when the assets produce a payment or performance. b) Investors acting in the market are individuals risk averse that maximize expected utility in one period, ie, the expected utility function is assumed biparametric, dependent solely on the expectation and variance of the random distributions probability yields financial assets at risk. Although this assumption may arise from the quadratic utility function, due to the significant drawbacks of this function to adequately represent a rational and risk adverse investor, it is considered the logical consequence of assuming that asset returns are normally distributed. c) The expectations of investors about the expected returns, volatilities and covariance between assets are the same. In other words, investors are âprice takersâ featuring homogeneous expectations about return distributions of the different risk financial assets, allowing considering a unique set of investment opportunities for all investors, represented by the so-called efficient border. As in the previous case, that the only selection criteria used are the mean and variance of the distributions of as>
better known as CAPM, for its name in English (Capital Asset Pricing Model), was developed by Sharpe (1964) and Litner (1965). Both based their studies on research conducted by Markowitz and Tobin (1960), who affi rmed that all investors select their portfolios through the mean-variance criterion. The objective is quantified car model and interpret the relationship between risk and return because through this linear relationship can establish the balance of the financial markets. Like any economic model, the CAPM based its relevance more or less restrictive assumptions, which have enabled it to draw conclusions universally accepted. According to Sharpe (1964), the basic assumptions on which is built the CAPM are: a) It is a static model, that is, there is only one period in which the assets are traded or exchanged at the beginning of the period and consumption takes place at the end of it when the assets produce a payment or performance. b) Investors acting in the market are individuals risk averse that maximize expected utility in one period, ie, the expected utility function is assumed biparametric, dependent solely on the expectation and variance of the random distributions probability yields financial assets at risk. Although this assumption may arise from the quadratic utility function, due to the significant drawbacks of this function to adequately represent a rational and risk adverse investor, it is considered the logical consequence of assuming that asset returns are normally distributed. c) The expectations of investors about the expected returns, volatilities and covariance between assets are the same. In other words, investors are âprice takersâ featuring homogeneous expectations about return distributions of the different risk financial assets, allowing considering a unique set of investment opportunities for all investors, represented by the so-called efficient border. As in the previous case, that the only selection criteria used are the mean and variance of the distributions of as>
