Although the capm does not fully withstand empirical tests, it is widely used because its accuracy suffices for many important applications a If it is wrong this means that we can do better" than the market portfolio(assuming that expected return and standard deviation are what matter for us) The intuition behind the capm will be the basis for the more advanced asset pricing models that we will look at◼ Although the CAPM does not fully withstand empirical tests, it is widely used because its accuracy suffices for many important applications. ◼ If it is wrong, this means that we can “do better" than the market portfolio (assuming that expected return and standard deviation are what matter for us). ◼ The intuition behind the CAPM will be the basis for the more advanced asset pricing models that we will look at