| InvestHub.com's Finance Dictionary and Glossary of Investment Terms Capital Asset Pricing Model - CAPM Definition 1.
A model describing the relationship between risk and expected return that is used in the pricing of risky securities. CAPM says that the expected return of a security or a portfolio equals the rate on a risk-free security plus a risk premium. If this expected return does not meet or beat the required return then the investment should not be undertaken. |
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