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Capstone 03 · Asset pricing

Factor Pricing Lab

Build an auditable tear sheet that links economic factors to a portfolio’s returns. Compare CAPM and three-factor specifications, use robust uncertainty, inspect rolling exposures, and express the pricing restrictions as moment conditions.

Data design and provenance

This build uses deterministic synthetic monthly factors and portfolio excess returns because reuse permission was not verified for external observations. Variable conventions follow the teaching structure of the verified Kenneth French Data Library; no external observations are redistributed.

What expert work looks like

A professional tear sheet aligns dates and units, identifies the risk-free convention, compares nested economic stories, reports uncertainty rather than only exposure estimates, and separates in-sample description from investable out-of-sample evidence.