bwBASIC/BP100/CAP1.BAS

1 REM CAP1
5 CLEAR 1000
10 CLS
20 PRINT TAB(5);"CAPITAL ASSET PRICING MODEL ANALYSIS OF PROJECT"
25 PRINT"THE CAPITAL ASSET PRICING MODEL  STUDIES THE RISK-RETURN
30 PRINT"IMPACT OF AN INVESTMENT PROPOSAL UPON AN INVESTOR'S PORTFOLIO
35 PRINT"OF STOCKS AND OTHER INVESTMENTS. THE MODEL GIVES THE EXPECTED
40 PRINT"RETURN FOR AN INVESTMENT GIVEN THE EXPECTED RETURN FOR THE
45 PRINT"MARKET AS A WHOLE, THE RISK-FREE(I.E. U.S.TREASURY BOND)
50 PRINT"INTEREST RATE, AND THE VOLATILITY OF THE RETURN ON THE INVEST-
55 PRINT"MENT WITH RESPECT TO THE REST OF THE MARKET. A VOLATILITY OF
60 PRINT"1 MEANS THE RETURN ON THE INVESTMENT WILL CHANGE JUST AS THE
65 PRINT"MARKET CHANGES, A VOLATILTY GREATER THAN 1 MEANS THE INVEST-
70 PRINT"MENT'S RETURN MOVES IN THE SAME DIRECTION AS THE MARKET BUT
75 PRINT"AT A MORE RAPID RATE. VOLATILITY OF 0 MEANS THE RETURN ON THE
80 PRINT"INVESTMENT IS INDEPENDENT OF MARKET MOVEMENT. NEGATIVE
85 PRINT"VOLATILITY MEANS RETURN ON THE INVESTMENT AND THE MARKET MOVE
90 PRINT"IN OPPOSITE DIRECTIONS.
95 INPUT"PRESS ENTER TO CONTINUE";Z9$
97 CLS
100 PRINT"FOR PUBLICLY TRADED STOCKS VOLATILITY MAY BE ASCERTAINED
105 PRINT"BY EXAMINING THE LITERATURE. JUST LOOK FOR BETA.
110 PRINT"FOR OTHER INVESTMENTS ASCERTAINING VOLATILITY IS SOMEWHAT
112 PRINT"MORE DIFFICULT.
115 PRINT
120 INPUT"PRESS ENTER TO BEGIN";Z9$
200 CLS
210 INPUT"ENTER TREASURY INTEREST RATE(%) ";RF:RF=RF/100
220 INPUT"ENTER EXPECTED MARKET RETURN(%) ";RM:RM=RM/100
230 INPUT"ENTER VOLATILITY FOR INVESTMENT ";B
240 RI= RF + (RM-RF)*B:REM RI IS EXPECTED RETURN
250 RI=RI*100
260 PRINT"THE EXPECTED RETURN ON THIS INVESTMENT IS ";RI;"%"
270 PRINT:PRINT
275 RF=RF*100:RM=RM*100
280 INPUT"PRESS ENTER FOR MORE COMPUTATIONS";Z9$
285 IF Z9$ = "-1" THEN END
290 GOTO 200