There are many ways to invest money. Jaleel wonders what are the investment options he can choose from. Choose three asset classes from the list below and help Jaleel to have a closer look at each of them. You are expected to explain the unique characteristics of the asset class, their associated risks and potential returns. For each asset class, you should use one or two examples to support your explanation. Asset Class Characteristics Risk Potential Returns Example Cash Products Fixed Income Equities Currencies Derivatives

Q: explain how capital asset pricing model (CAPM) won a novel prize.

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Q: main participants

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Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.