William Sharpe (1964) published the Capital Asset Pricing Model (CAPM): According to CAPM, return of a portfolio is equal to the sum of risk-free rate of return and a risk premium that is proportional to its beta. As per this model, risk and return are linearly associated. Ri = Rf+ βi (Rm-Rf) Where, Ri = Risk free rate of return [...]
Systematic risk can be measured using beta. Stock Beta is the measure of the risk of an individual stock in comparison to the market as a whole. Beta is the sensitivity of a stock's returns to some market index returns (e.g., S&P 500). Basically, it measures the volatility of a stock against a broader or more general market. It is [...]
Here is a term paper on ‘Capital Asset Pricing Model (CAPM)’. Find paragraphs, long and short term papers on ‘Capital Asset Pricing Model (CAPM)’ especially written for school and college students. Term Paper Contents: Term Paper on the Capital Asset Pricing Model Term Paper on the Assumptions of CAPM Term Paper on the Security Market Line (SML) Term Paper on [...]