Q » What is the capital asset pricing model (CAPM) and how is it used?
17 Oct, 2025
A » The Capital Asset Pricing Model (CAPM) is a finance theory that describes the relationship between systematic risk and expected return for an asset, particularly stocks. It is used to determine a theoretically appropriate required rate of return of an asset, factoring in its risk relative to the market. CAPM is widely used in finance for pricing risky securities and calculating the cost of equity, aiding in investment decision-making.
17 Oct, 2025
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