Capital asset pricing model - A model for generating expected equity returns. It is based on the premise that returns are the reward for taking on risk, and that risk can be split into two types: stock-specific risk and market risk.Since stock-specific risk can be mitigated by diversification policies, investors should not be compensated for taking this on. Expected returns should only be a function of the share"s response to returns on the market as a whole, which is given by the share"s beta.
Capital asset pricing model : a model for generating expected equity returns. it is based on the premise that returns are the reward for taking on risk, and that risk can be split into two types: stock-specific risk and market risk.since stock-specific risk can be mitigated by diversification policies, investors should not be compensated for taking this on. expected returns should only be a function of the share"s response to returns on the market as a whole, which is given by the share"s beta.
Capital asset pricing model