Difference ICAPM and extended CAPM

sherbeer · May 11, 2009, 3:30pm

What is the difference between ICAPM and extended CAPM?

mp2438 · May 11, 2009, 3:41pm

The letter “I”! Was that an easy question in the q-bank? Qualitatively: Extended CAPM- makes 2 more assumptions about portfolio theory to apply it on an international context: 1. Investors have identical consumption baskets 2. PPP holds exactly at any point in time. ICAPM- requires investors to consider the real exchange rate associated with foreign currencies. (uses the formula for local/domestic currency sensitivities Y(DC) = Y(LC)+1)

mp2438 · May 11, 2009, 3:43pm

Just found this, hopefully it helps: www.it.nccu.edu.tw/faculty/lkhu/IFM/97-2/ch04.ppt

cjones65 · May 11, 2009, 3:58pm

Thanks, mp.

sherbeer · May 11, 2009, 5:03pm

Thanks, It really helps a lot.

kevincwang · May 11, 2009, 5:14pm

Thanks, mp that’s more details than notes talked about

ndzhai · May 11, 2009, 5:27pm

if you keep changing the figures, ch01, 02 …

mp2438 · May 11, 2009, 5:37pm

^brilliant. CFA in a PPT.

SpyAli · April 10, 2012, 2:04am

Does any one have this PPT? I’m having trouble in digesting this concept :S