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Background:
The capital asset pricing model is proposed by William Sharpe and John Lintner in 1965, which is based on Marry A.Markowit’s portfolio theory, it is referred to as the CAPM model. The model brings a far-reaching impact on western financial Theory, and it is regarded as one of the three bedrocks of modern financial theory. CAPM model with concise form and easy-to-use advantage has been widely applied in many aspects, such as stock returns predict, securities portfolio performance evaluation, event study Analysis, the stock price and determine capital cost, etc. Since the CAPM model was put forward, it was under a lot of attention. In the 1970s, western scholars begin to carry out a great deal of empirical test on CAPM. The Early test results show that the model CAPM in western mature stock market is effective, average stock returns and β have the positivelinear correlation.financial essay But since the late 1980s, the empirical results of the CAPM model changed, most inspection results do not support CAPM model, this positive correlation between the average stock returns and risks disappeared in the data in the 1970s. Meanwhile, many other factors were found to have explaining ability for stock gains, for example, significant considering whether there are other factors could explain the differences in cross-section.

Research objectives/questions:
Research strategy and methods
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