What does the capital asset pricing model (CAPM) calculate? a. The expected rate of return on an individual stock with respect to the risk-free rate of return b. The expected rate of return of an individual stock based on its overall risk c. The expected rate of return of an individual stock with respect to its market risk only d. The expected rate of return of an individual stock reflecting its financial risk
What does the
The expected
The expected rate of return of an individual stock based on its overall risk
The expected rate of return of an individual stock with respect to its market risk only
The expected rate of return of an individual stock reflecting its financial risk
Capital Asset Pricing Model (CAPM) is a financial model used to determine expected return on an investment taking into account its risk as measured by its beta coefficient. CAPM is widely used in finance and investment to estimate the appropriate required rate of return for an investment especially when evaluating risk and return potential of stocks, portfolios or other assets.
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