CAPM
From Reuters Financial Glossary
(Redirected from Capital Asset Pricing Model)
Synonym: Capital Asset Pricing Model
Capital Asset Pricing Model. A model that tracks the relationship between risk and expected return. It stipulates that the return on a risky asset is equal to the risk-free rate plus a risk premium. The risk premium is the stock's beta multiplied by the difference between the market rate of return and the risk-free rate.
See also: Beta
