Calculate the expected rate return of an asset given the knowledge of the risk associated with the asset. Calculate the cost of capital. Determine the price of a risky asset.

Using the capital asset pricing model, the expected return is what an investor can expect to earn on an investment over the life of that investment.

Under the capital asset pricing model, you must hold stocks for long enough to allow the price to increase enough to justify the investment. This usually takes years.

The capital asset pricing model (CAPM) is a financial model used to determine a security’s expected return considering its associated risk.

The Capital Asset Pricing Model (CAPM) offers a good starting point for stock analysis. Here we explore what CAPM is, examples, and how it works.

The consumption capital asset pricing model (CCAPM) is an extension of the capital asset pricing model but one that uses consumption beta instead of market beta.

The capital asset pricing model is a fundamental building block with which investors make allocation decisions over time.

Arbitrage pricing theory (APT) is an alternative to the capital asset pricing model (CAPM) for explaining returns of assets or portfolios. It was developed by economist Stephen Ross in the 1970s.

The Capital Asset Pricing Model, or the CAPM, is a model used to: Calculate the expected rate return of an asset given the knowledge of the risk associated with the asset. Calculate the cost of ...

The Capital Asset Pricing Model is a model that describes the relationship between risk and expected return. Learn more today with The Motley Fool UK ...