Asset market CAPM: Capital Asset Pricing Model Consumption of the next period depend on how to invest the wealth in different assets c=(-c∑xR=(m-cxR+∑xR a= R is the return of asset a and x, is the percentage of it. Asset 0 is the no riskyAsset market • CAPM: Capital Asset Pricing Model – Consumption of the next period depend on how to invest the wealth in different assets. – is the return of asset a and is the percentage of it. Asset 0 is the no risky. 0 0 0 1 ( ) ( )[ ] A A a a a a a a c w c x R w c x R x R = = = − = − +   R a a x