Empirical design

Abstract

The theory of beta pricing constitutes a suitable framework to examine the trade-off between risk and return of international investments. Therefore, beta pricing models can be applied straightforwardly for an empirical assessment of the research questions addressed in this work. Recall that the major intention of my thesis is to explore the global forces affecting the evolution of asset prices over time as well as the long-term expected returns on international stock and bond markets. The present chapter provides the link between the theoretical considerations on beta pricing supplied in Chapter 2 as well as Chapter 3 and the empirical analysis constituting the second main part of this work.