**Preface to "Frontiers of Asset Pricing"**

The famed Capital Asset Pricing Model (CAPM) of Sharpe, Lintner, Mossin, and Black in the 1960s proposed an equilibrium theory wherein the expected return of an asset is a function of beta risk associated with the expected return of the market portfolio. The CAPM was a pathbreaking model derived from Markowitz portfolio theory and Tobin equilibrium pricing advances.

Unfortunately, in the 1990s, Fama and French published a series of widely-cited papers that documented little or no relation between beta risk and average U.S. stock returns. Concluding that the CAPM was dead, they proposed a number of empirically-based models incorporating long/short portfolio returns as multifactors. Their multifactor models supplanted the CAPM. Subsequently, researchers proposed similar models with different multifactors. However, as Cochrane has opined, a factor zoo has developed. Nowadays intense competition exists in terms of alternative multifactors and models.

> **James W. Kolari and Seppo Pynnonen** *Editors*
