Abstract
In this paper, we first analyze and summarize the background to CAPM development. The CAPM model is introduced in detail, the development process of the model and its advantages and limitations are analyzed and expounded. And set out the current state of research on CAPM models at home and abroad. The previous literatures of other researchers were cited, and their views were sorted and analyzed one by one. Once we had a basic understanding of the CAPM model, on this basis, all of the monthly A share data in the CSMAR database from February 1994 to August 2021 were selected as samples to sort and preprocess the data. T-test analysis was performed on the Fama-Macbeth regression model. From the regression results, it can be seen that only the market factor is significant out of all the factors, thus, one can conclude that the CAPM model is effective in explaining the market for A stocks.
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