CAPM Definition

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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.

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CAPM is in the Stocks subject.

Related terms

market return, market risk premium

CAPM appears in the definitions of these other terms on BusinessDictionary.com

efficient market hypothesis, arbitrage pricing theory (APT), dividend capitalization model

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