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Q » How do you calculate expected return using CAPM?
06 Dec, 2025
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A » The Capital Asset Pricing Model (CAPM) calculates expected return using the formula: Expected Return = Risk-Free Rate + Beta * (Market Return - Risk-Free Rate). Here, the risk-free rate is the return on a risk-free investment, beta measures the stock's volatility relative to the market, and the market return is the expected return of the market portfolio.
06 Dec, 2025
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