Intense, real-world, memorable - gamified simulation training
Intense, real-world, memorable - gamified simulation training
In this Capital Asset Pricing Model Simulation, participants step into the role of portfolio managers and financial analysts applying the foundational CAPM to make critical investment decisions, construct optimal portfolios, and communicate strategy.
The Security Market Line and its application
Calculating and interpreting beta as a measure of systematic risk
Estimating the market risk premium and risk-free rate
Determining required rates of return for individual assets and portfolios
Portfolio construction, diversification, and the efficient frontier
Alpha generation and performance measurement against the CAPM benchmark
Critiques and limitations of the CAPM in practical settings
Applying CAPM in corporate finance for project valuation and cost of capital
In the simulation, participants will:
Analyze company financials and market data to estimate asset betas.
Calculate required rates of return using the CAPM formula for various securities.
Construct and rebalance investment portfolios to achieve target risk/return profiles.
Pitch portfolio strategies and investment theses to simulated clients or committees.
Respond to dynamic market shocks, such as changes in interest rates or market volatility.
Evaluate portfolio performance using metrics like Sharpe ratio and alpha.
Explain the components and underlying assumptions of the Capital Asset Pricing Model.
Calculate a company's cost of equity using the CAPM framework.
Differentiate between systematic and unsystematic risk.
Construct a diversified portfolio and explain its position relative to the Security Market Line.
Apply CAPM to make informed investment decisions and valuations.
Communicate complex financial concepts and portfolio strategy effectively to stakeholders.
Critique the practical usefulness and limitations of the CAPM.
1. Receive the Market Brief Participants are introduced to the economic landscape, including current risk-free rates, expected market returns, and a set of potential investment opportunities.
** 2. Conduct Financial Analysis** They analyze provided data on companies, estimate betas, and calculate required returns using the CAPM formula.
3. Make Investment Decisions Participants allocate funds across securities to build a portfolio that aligns with a given mandate.
4. Collaborate and Negotiate In team settings, members debate strategies, align on risk tolerance, and prepare client communications.
5. Communicate Strategy Teams present their portfolio rationale, highlighting CAPM-based valuations and risk assessments.
6. Review Outcomes and Reflect The simulator generates performance reports, showing returns vs. the benchmark. Facilitated debriefs connect outcomes to theoretical concepts, guiding strategy evolution for the next round.
Who is the CAPM simulation designed for? It is perfect for students in finance, business, or economics programs, as well as professionals in early-career roles in investing, corporate finance, or financial planning who need to master the practical application of asset pricing models.
Do I need advanced math or prior finance experience? No. The simulation is designed to be accessible. It includes instructional content that guides you through the necessary calculations and concepts, making it suitable for all levels.
How long does a typical simulation session last? The core simulation experience is designed to be completed in 2-4 hours. It can be broken into modules for shorter class sessions or extended for deeper analysis.
Is this an individual or team-based activity? It supports both formats. Participants can work alone to master the concepts or in teams to simulate the collaborative environment of an investment committee.
Does the simulation use real market data? Yes. Participants work with simulated data that reflects realistic market behaviors, company financials, and economic conditions, based on historical and contemporary financial scenarios.
Can the simulation content be customized for our specific course? Absolutely. Instructors can tailor parameters such as the companies analyzed, market conditions, risk variables, and specific learning outcomes to match their syllabus.
What roles does this simulation prepare participants for? It builds foundational skills for roles in equity research, portfolio management, investment banking, corporate financial analysis, and any position requiring robust asset valuation and risk assessment.
How does this simulation help with SEO for our program page? By integrating targeted keywords like "CAPM simulation," "beta calculation," "portfolio management training," and "finance simulation" naturally within the page content, it improves search visibility for educators and students seeking applied learning tools in these areas.
Correct application of the CAPM formula and beta estimation.
Risk-adjusted returns relative to the market benchmark.
Quality and justification of investment choices.
Clarity and persuasiveness in presenting the portfolio strategy.
Effectiveness in group discussions and decision-making (for team-based runs).
Join this 20-minute webinar, followed by a Q&A session, to immerse yourself in the simulation.
or
Book a 15-minute Zoom demo with one of our experts to explore how the simulation can benefit you.
