Projective Capital Asset Pricing Model

This paper is interested in exploring the capabilities and limitations of investment decision making under uncertainty through lens Quantum Probabilities/formalism stand will be focusing on Capital Asset Pricing Model as use case. Our main purpose to examine historical structural foundations surrounding paradoxes. To ease comprehension issue common reader, we first outline key cornerstones two competing conceptual frameworks, expected utility mean-variance. We review then axiomatic justifications mean-variance set comparison with Expected generally. That's when analogy quantum probabilities arises. comes from fact that process seems more likely presented terms amplitudes. Thus, here refer a calculus states not probabilities. In final section, present capital asset pricing model understand appeal usage Mean variance over financial theory, how can remediate this approach once decisions are depicted probability Several extensions rational decision-making theory using classical formulations emerged depending actual empirical findings, trying explain such paradoxes improve existing framework theory. These simplifying assumptions were seeking generate probabilistic measures without linearity or make State-independent estimates well agents’ possessing firm generalized loosened. While these trials helped discuss pitfalls some situations, it failed give harmonized theoretical model. An established consider prospect by Kahneman Tversky which encompasses human biases heuristic. Indeed, its attributes extended general mathematical scope.