Capital Asset Pricing Model (CAPM) | Stock Market | Portfolio Management

William Sharpe (1964) published the Capital Asset Pricing Model (CAPM): According to CAPM, return of a portfolio is equal to the sum of risk-free rate of return and a risk premium that is proportional to its beta. As per this model, risk and return are linearly associated. Ri = Rf+ βi (Rm-Rf) Where, Ri = Risk free rate of return [...]