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PERFORMANCE ASSESSMENT INDEXES AND CAPITAL ASSET PRICING MODELS

PERFORMANCE ASSESSMENT INDEXES AND CAPITAL ASSET PRICING MODELS The applicability of capital asset pricing theory to the derivation of performance measures for real estate is examined. Although risk and return are fundamental concepts in modern finance they are seldom treated formally in nonacademic discussions of asset performance. An explanation is sought for the apparent failure to adopt formal models which have been developed and tested in the share markets for performance assessment in the real property market. The evidence suggests that it may not be the difference in approach pursued by real estate professionals toward valuation visvis share market analysts but rather the inapplicability of capital asset pricing models to real property returns that is the explanation for the lack of standardised measures. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Valuation Emerald Publishing

PERFORMANCE ASSESSMENT INDEXES AND CAPITAL ASSET PRICING MODELS

Journal of Valuation , Volume 5 (3): 20 – Mar 1, 1987

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0263-7480
DOI
10.1108/eb008010
Publisher site
See Article on Publisher Site

Abstract

The applicability of capital asset pricing theory to the derivation of performance measures for real estate is examined. Although risk and return are fundamental concepts in modern finance they are seldom treated formally in nonacademic discussions of asset performance. An explanation is sought for the apparent failure to adopt formal models which have been developed and tested in the share markets for performance assessment in the real property market. The evidence suggests that it may not be the difference in approach pursued by real estate professionals toward valuation visvis share market analysts but rather the inapplicability of capital asset pricing models to real property returns that is the explanation for the lack of standardised measures.

Journal

Journal of ValuationEmerald Publishing

Published: Mar 1, 1987

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