Prices here are determined with reference to macroeconomic variables–for the CAPM, the "overall market"; for the CCAPM, overall wealth– such that individual preferences are subsumed.
(Note that an alternate, although less common approach, is to apply a "fundamental valuation" method, such as the T-model, which instead relies on accounting information, attempting to model return based on the company's expected financial performance.)
See Rational pricing § Fixed income securities, Bootstrapping (finance), and Multi-curve framework.
[8] Correspondingly, this essentially means that one may make financial decisions, using the risk neutral probability distribution consistent with (i.e. solved for) observed equilibrium prices.
[10] [11] The CAPM, for example, can be derived by linking risk aversion to overall market return, and restating for price.
[9] Black-Scholes can be derived by attaching a binomial probability to each of numerous possible spot-prices (i.e. states) and then rearranging for the terms in its formula.