A study of selection of optimum portfolio through CAPM with reference to financial modeling

Financial modeling is a process of forecasting performance of a certain asset, using relationships among operating, investing, and financing variables. The central aim of all financial modeling is valuation under uncertainty: how to estimate the value of a security when it's future trajectory, or the trajectory of the other securities or economic variables it depends on, is unknown. Usually, financial modeling requires a great deal of spreadsheet work. Financial modeling is the task of building a model of a financial decision making situation. This is a mathematical model designed to represent (a simplified version of) the performance of a financial asset or portfolio of a business, project, or any other investment. Financial modeling is a general term that means different things to different users; the reference usually relates either to accounting and corporate finance applications, or to quantitative finance applications. The Objectives of the study is to explore application of financial modeling in selection of portfolio with help of CAPM. Next emphasis has been given to check validity of CAPM model. Data has been approached from various sites, research journals, and other references whose link has been given in reference part.