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 ...

For simplicity, assume no inflation. Basically, the real yield on long-term treasuries is Rf. The expected return on equities is ERi, which is the risk-free rate plus the premium investors demand in ...

The market risk premium is equal to the slope of the security market line (SML), a graphical representation of the capital asset pricing model (CAPM). CAPM measures the required rate of return on ...