Kristina Zucchi is an investment analyst and financial writer with 15+ years of experience managing portfolios and conducting equity research. Vikki Velasquez is a researcher and writer who has ...

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 ...

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 ...

Pete Rathburn is a copy editor and fact-checker with expertise in economics and personal finance and over twenty years of experience in the classroom. The capital asset pricing model (CAPM) and the ...

Mathematical models are a way to attempt to predict the probable outcome of a complex situation. From climate, stock market and physics models, you can use mathematical formulas to determine a range ...

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 ...

CAPM calculates expected stock returns using the risk-free rate, stock beta, and market return. The riskier the stock, the higher the return investors should demand. CAPM aids in investment analysis ...

Rachael has a Bachelor’s degree in mass media from Wilson College, Mumbai and a Master’s degree in English from Pune University. The Capital Asset Pricing Model (CAPM) is a foundational concept in ...