Abstract
diversified market portfolio. He finds that a significant portion of returns to farmland are not explained by his model and they can therefore be classified as nonmarket returns. The two major claims of his paper are that it provides evidence that farm real estate has low risk relative to other assets and that the CAPM framework provides insights into the effects of nonfarm investor behavior. Empirical support is provided by Barry for the former and little or no discussion is offered by him in relation to the latter. The purpose of this comment is to suggest that farmland returns are not dictated by returns in a portfolio comprised of bonds, stocks, and farmland, and it is unsuitable to investigate them with the CAPM model which assumes they are. In an equilibrium setting, the CAPM develops a measure of the risk of an asset and the consequent relationship between the asset's risk and its oneperiod expected return. The major result of the CAPM is often expressed as
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