In words: the random error is assumed to be zero on average and uncorrelated with the factor. Note that the details of the example will differ if the margin is specified as a percentage of the contract price rather than a given amount per contract. Gucci Flat Ankle Boots. Interest rates are quoted on an annual basis, so that when the time period is different from a year (it is normally much shorter) the rate is rescaled to allow for the duration of the loan. Gucci Sofia Gravel. Consider a bond that promises to pay to its holder a coupon of c per year for n years plus the face value, m, when the bond terminates at maturity. Gucci Flat Ankle Boots. In another of their influential contributions, Fama and French (1993) explore the implications of a factor model relevant for both equities and bonds. Gucci Jacquard Leather Trim. Conversely, if the impact of the additional variables on asset returns is significant, the evidence points against the CAPM - because the CAPM predicts that beta-coefficients alone are sufficient to explain the cross-section of returns. Gucci Flat Ankle Boots. While this neglect does not mean that (10.8) is wrong, it does hint that the equilibrium pt may not be unique.