Stochastic Models for Capital Asset Pricing: Impact of Delay Parameters on Asset Valuation

In finance generally, investments are ventures associated with risk which cannot be avoided in daily lives. Therefore this paper considered stochastic systems with importance on disparities of stock quantities by implementing the Ito's method of solution where certain measures were given on the assessments of asset values with and without delay parameters. Consequently, the impressions on Tables for investors in financial markets were analyzed to establish empirically the characteristics of asset values with and without delay parameters when volatility increases. From the stochastic analysis of the problem we presume that; increase in volatility decreases the value of assets, incorporating delay parameter increases the value of assets, the asset values with delay is realistic than those that do not for a few reasons; More so, the probability normal plot shows positive linear trend which suggests that the distribution of asset values is symmetrical and centered around the mean; which investors can make more informed decisions about their investments. Finally theorems were developed and proved show casing the progress of time varying investments and to the best of our knowledge this is the first of its kind to have assessed asset values with and without delay parameters to suit financial market for capital investments which is informative to investors in time varying investments.