  Although the CML (Capital Market Line), the Intertemporal-CAPM, the CAPM/SML
(Security Market Line) and the Intertemporal Arbitrage Pricing Theory (IAPT)
are widely used in portfolio management, valuation and capital markets
financing; these theories are inaccurate and can adversely affect risk
management and portfolio management processes. This article introduces several
empirically testable financial theories that provide insights, and can be
calibrated to real data and used to solve problems, and contributes to the
literature by: i) explaining the conditions under which ICAPM/CAPM, IAPT and
CML may be accurate, and why such conditions are not feasible; and explaining
why the existence of incomplete markets and dynamic un-aggregated markets
render CML, IAPT and ICAPM inaccurate; ii) explaining why the
Consumption-Savings-InvestmentProduction framework is insufficient for asset
pricing and analysis of changes in risk and asset values; and introducing a
unified approach to asset pricing that simultaneously considers six factors,
and the conditions under which this approach will work; iii) explaining why
leisure, taxes and housing are equally as important as consumption and
investment in asset pricing; iv) introducing the Marginal Rate of Intertemporal
Joint Substitution (MRIJS) among Consumption, Taxes, Investment, Leisure,
Intangibles and Housing - this model incorporates Regret Theory and captures
features of reality that dont fit well into standard asset pricing models, and
this framework can support specific or very general finance theories and or
very complicated models; v) showing why the Elasticity of Intertemporal
Substitution (EIS) is inaccurate and is insufficient for asset pricing and
analysis of investor preferences.
