One simple but powerful method investors can use to assess the risk and reward of a stock portfolio is using the Capital Asset Pricing Model, or CAPM, model for expected returns. The basics of CAPM ...

Investors understand intuitively that some stocks are riskier than others. The capital asset pricing model attempts to quantify the common perception of risk using a term called beta. By understanding ...

Recognizing that a part of the unobservable market portfolio is certainly observable, we first reformulate the CAPM so that asset returns can be related to the `benchmark' beta computed against a set ...

Investors understand intuitively that some stocks are riskier than others. The capital asset pricing model attempts to quantify the common perception of risk using a term called beta. By understanding ...