CAPM Definition

CAPM

Definition

Capital Asset Pricing Model. An economic model for valuing stocks by relating risk and expected return. Based on the idea that investors demand additional expected return (called the risk premium) if asked to accept additional risk.

Reproduction of all or part of this glossary and/or this page, in any format, without written consent is prohibited. If you have questions about this dictionary please feel free to contact us feedback\@\investorguide.com

Related Terms

market return -

market risk premium - More

Related Terms on BusinessDictionary

arbitrage pricing theory (APT)
dividend capitalization model

efficient market hypothesis

Popular 'Stocks' Terms

equity
common stock
mutual fund
preferred stock
stock

debt/equity ratio
security
P/E ratio
market capitalization
book value

CAPM in the news

Tools

CAPM is ...

... part of the Stocks subject.

Nearby Terms

capitalize
capitalized cost
capitalized cost reduction
capitalized interest
capitulation
CAPM
capped-style option
capping
captive agent
captive insurance company
caput

Search volume for CAPM

Review the unprecedented moves the Fed & Treasury took to bring the financial markets back from the precipice