Intertemporal CAPM

Intertemporal CAPM (Capital Asset Pricing Model) is kind of like a puzzle. It helps us figure out the right prices for stocks and bonds. It starts with looking at how the prices of stocks and bonds have changed over time. Then it looks at how different kinds of stocks have performed in the past and comes up with a formula that helps us predict how they will perform in the future. The formula tries to tell us what people will be willing to pay for a stock or bond based on how it has done in the past and what kind of risk it has. That way, we can make sure we get the right price when we buy or sell stocks and bonds.