In other words, the more risk you take on, the higher returns you hope to earn. The capital asset pricing model (CAPM) helps investors understand the returns they can expect given the level of ...

Many investors use the capital asset pricing model (CAPM) as a way to estimate the potential return of a stock or other asset within the context of its intrinsic risk. Used primarily to analyze ...

Merton, Robert C. "A Dynamic General Equilibrium Model of the Asset Market and Its Application to the Pricing of the Capital Structure of the Firm." Sloan School of Management Working Paper, No.

The market risk premium is equal to the slope of the security market line (SML), a graphical representation of the capital asset pricing model (CAPM ... but conventional knowledge has generally ...

Merton, Robert C. "A Reexamination of the Capital Asset Pricing Model." In Studies in Risk and Return, edited by J. Bicksler and I. Friend. Cambridge, MA: Ballinger Publishing Company, 1977.