In the subjects that says " Deriving the CAPM – A more rigorous approach", and “Prices and the CAPM” … they derive the CAPM and I dont know if we are expected to be able to do it? it looks like a lot of math and a lot of memorizing, and I dont know if tis something that could be in the exam…
In “Prices and the CAPM” they show how to use CAPM using prices, my question is the same as the last one, do we have to know how to do that?
any input or help would be greatly appreciated.
No, I would not worry about deriving the CAPM mathematically. I would expect that GARP will ask some question about your knowledge of the CAPM final formulas, assumptions underlying the model, and that sort of thing.
If I’m being honest, I’d also point out that CAPM has historically been one of the domains of the CFA exam…GARP is trying to promote a credential that is value-added outside of the CFA, and so focus on the basic, plain-vanilla version of CAPM is not likely to be heavy. I would focus on knowing the other variations of the CAPM shown like the tax-modified and the inflation-modified versions, if I am remembering correctly.
Thank you very much for the help Destroyer
You are very welcome, JCM. Best of luck.