Many investors use the capital asset pricing model (CAPM) as a way to estimate the potential return of a stock or other asset within the context of its intrinsic risk. Used primarily to analyze ...

Rachael has a Bachelor’s degree in mass media from Wilson College, Mumbai and a Master’s degree in English from Pune University. The Capital Asset Pricing Model (CAPM) is a foundational concept in ...

In the 1960s, Jack Treynor, William F. Sharpe, John Lintner, and Jan Mossin developed the capital asset pricing model (CAPM) to determine the theoretical appropriate rate that an asset should return ...

Cost of equity calculates an asset's required return, aligning it with investment risk. It is determined using dividend capitalization or CAPM, providing a threshold for viable projects. This metric ...

For thousands of years, mankind has understood that there is a tradeoff between risk and return. Yet the struggle to define the exact nature of the risk-return relationship continues. In the ...

This article originally appeared in the fall 2019 issue of Morningstar Magazine. To learn more about Morningstar Magazine, please visit our corporate website. The Capital Asset Pricing Model is one of ...

Steven Nickolas is a writer and has 10+ years of experience working as a consultant to retail and institutional investors. Thomas J. Brock is a CFA and CPA with more than 20 years of experience in ...