Risk and Return in Emerging Markets: Family Matters

In order to evaluate projects, value firms, optimize capital structures and implement investment strategies, companies and investors need to know the risk variables that ultimately determine expected returns. While in developed markets there is at least a “model to beat,” the CAPM, in emerging markets there is no standard, widely accepted way of estimating required returns on equity. In this article, the authors perform a statistical and economic analysis of the risk-return relationship in emerging markets. Their purpose is to compare the performance of three families of risk/return models usually considered separately in the literature: traditional, factor, and downside risk.

Editor’s Note: read a more detailed abstract at
Ana Paula Serra, Javier Estrada
Source: IESE Insight
Subjects: Finance, International

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1 Comment

  1. I agree very much with the articles most employees(myself included) feel that they are not recognised as such in their companies and that their input is also not valued as all decesions are made by the top management and then passed down to the rest without even considering how those decisions will affect those at the bottom.

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