Stephen Ross developed Arbitrage Pricing Theory in place of this model, while Jensen's alpha is often used to measure the excess return a security provides as predicted using this model.
Ongoing research by Jagannathan and Wang follows up on Mayer's work on this model, assuming human capital in their measure of wealth, while Banz used a method similar to that of Black and Scholes to test whether firm size explained any residual variation. Fama and French developed a three factor model in place of it, and Richard Roll's critique of it noted that "the market portfolio is unobservable." Stephen Ross developed Arbitrage Pricing Theory in place of this model, while Jensen's alpha is often used to measure the excess return a security provides as predicted using this model. All portfolios satisfying this model can be found on the Markowitz efficient frontier. Introduced by Lintner and Sharpe, for fifteen points, name this financial model which relies on the market risk premium and a financial instrument's beta to determine the appropriate rate of return.
Ongoing research by Jagannathan and Wang follows up on Mayer's work on this model, assuming human capital in their measure of wealth, while Banz used a method similar to that of Black and Scholes to test whether firm size explained any residual variation.
Capital {Asset} Pricing Model