THE EXPECTED RETURN TO EQUITY AND INTERNATIONAL ASSET PRICES.

The article presents the results of an empirical test, analysis, and comparison of the rate of return investors might expect in U.S., German, French and Japanese equity markets. The author notes the importance of this research in capital market theory—especially as it relates to the general market and individual securities. This empirical test involves developing, estimating and analyzing approximations and measuring them against the International Asset pricing model. The author develops a model to measure the expectations of the four international markets and then tested considering ex-post transformations of the model.