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.

Use CAPM in a sentence

We were glad to be able to consult the CAPM because it told us a lot of things that we needed to know.

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You should try and make sure that you are always aware of the CAPM and find a way to help it improve your business.

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The CAPM provided a framework we could use to understand the nature of the securities and investments being considered and analyzed.

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Fama-French three-factor model market risk premium