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 ...
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Model Risk
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Capital Asset Pricing Model  CAPM
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Empirical Probability
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Fama And French Three Factor Model
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Fundamental Analysis
Capital Asset Pricing Model  CAPM
CAPM is a model that describes the relationship between risk and expected return. 
Investing Basics
Seven Market Anomalies Investors Should Know
Though they're unpredictable and heavily contested, market anomalies can often work in an investor's favor. 
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. 
Fundamental Analysis
Taking Shots At CAPM
Find out why many investors think the capital asset pricing model is full of holes. 
Trading Systems & Software
Build a Profitable Trading Model In 7 Easy Steps
Trading models can provide a powerful tool for building profit. Traders can use and customize existing trading models or build an original model. This article provides seven steps to building ... 
Economics
What is a Business Model?
Business model is the term for a companyâ€™s plan as to how it will earn revenue. 
Investing Basics
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 Basics
Six Market Anomalies Investors Should Know
Certain tradable anomalies persist in the stock market. Here are six that fascinate investors. 
Professionals
Variability Of Returns
We look at scientific variability on market returns, as well as market return anomalies. 
Options & Futures
Financial Concepts: Capital Asset Pricing Model (CAPM)
Pronounced as though it were spelled "capm", this model was originally developed in 1952 by Harry Markowitz and finetuned over a decade later by others, including William Sharpe. The capital ...

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