Explore the capital asset pricing model's (CAPM) insights on risk and return, and its strengths and weaknesses to empower your investment choices.

The capital asset pricing model (CAPM) is a financial model used to determine a security’s expected return considering its associated risk. Developed in the 1960s, CAPM has become an essential tool in ...

One of the key insights of the CAPM is that it answers an important investment question: "What is the expected return if I purchase security XYZ?" The assumption that Sharpe built into the model is ...

Portions of this article were drafted using an in-house natural language generation platform. The article was reviewed, fact-checked and edited by our editorial staff. The capital asset pricing model ...

Investing has its risks. But there are strategies to determine an investment’s expected return, based on that risk. It’s called the Capital Asset Pricing Model (CAPM). Investors can use CAPM to ...

Learn about the Intertemporal Capital Asset Pricing Model (ICAPM), which helps investors manage market risks through ...

Journal of Applied Econometrics, Vol. 4, No. 2 (Apr. - Jun., 1989), pp. 119-138 (20 pages) We perform maximum-likelihood estimation of a model of international asset pricing based on CAPM. We test the ...

A group of our advisors attended a conference this past fall sponsored by Dimensional Fund Advisors. In his talk, "Risk Dimensions of the Market," Eugene F. Fama reviewed the latest data on the ...

The Capital Asset Pricing Model (CAPM) explains the correlation between the anticipated return and the risk of investing in a security using a beta value.(Image by StartupStockPhotos from Pixabay) ...