A NOTE ON THE MARKET MODEL AND THE TWO-PARAMETER MODEL.

The author presents comments on the market model and two-parameter models of capital market equilibrium from W.F. Sharpe and John Lintner. An overview is presented of the Sharpe-Linter model. The author notes that in a previous article he pointed out errors that Sharp and Lintner made in applying conditions on equilibrium expected returns of the two-parameter model, in which returns are generated by the so-called market model. In this article, the author asserts that some of the comments he made were incorrect.