What is an 'Anomaly'
An anomaly is a term describing the incidence when the actual result under a given set of assumptions is different from the expected result. An anomaly provides evidence that a given assumption or model does not hold in practice. The model can either be a relatively new or older model.
BREAKING DOWN 'Anomaly'
Anomalies often occur with respect to asset pricing models, in particular the capital asset pricing model (CAPM). Although the CAPM was derived by using innovative assumptions and theories, it often does a poor job in predicting stock returns. The numerous market anomalies that were observed after the formation of the CAPM helped form the basis for those wishing to disprove the model.
Although the model may not hold up in empirical and practical tests, that is not to say that the model does not hold some utility.

International Capital Asset Pricing ...
A financial model that extends the concept of the capital asset ... 
Empirical Probability
A form of probability that is based on some event occurring, ... 
Fama And French Three Factor Model
A factor model that expands on the capital asset pricing model ... 
Hullâ€“White Model
A singlefactor interest model used to price derivatives. The ... 
Business Model
The plan implemented by a company to generate revenue and make ... 
Robust
A characteristic describing a model's, test's or system's ability ...

Investing
Capital Asset Pricing Model  CAPM
CAPM is a model that describes the relationship between risk and expected return. 
Investing
The Capital Asset Pricing (CAPM) Model: Pros and Cons
CAPM, while criticized for its unrealistic assumptions, provides a more useful outcome than either the DDM or WACC in many situations. 
Investing
Seven Market Anomalies Investors Should Know
Though they're unpredictable and heavily contested, market anomalies can often work in an investor's favor. 
Investing
Taking Shots At CAPM
Find out why many investors think the capital asset pricing model is full of holes. 
Investing
What is a Business Model?
Business model is the term for a companyâ€™s plan as to how it will earn revenue. 
Investing
Making Sense Of Market Anomalies
Stocks sometimes thwart the efficient market theory by showing some very unusual patterns. 
Trading
Behavioral Finance: Anomalies
By Albert PhungThe presence of regularly occurring anomalies in conventional economic theory was a big contributor to the formation of behavioral finance. These socalled anomalies, and their ... 
Investing
Introduction To International CAPM
ICAPM is one of several models used to determine the required return on an asset, discover its limitations and how to use it. 
Investing
Understanding Financial Models
A financial model is a representation of some aspects of a firm or given security. It uses historical numbers to create calculations that inform financial recommendations or predict future financial ... 
Investing
Six Market Anomalies Investors Should Know
Certain tradable anomalies persist in the stock market. Here are six that fascinate investors.

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