CAPM is that 'Capital Asset Pricing Model'. CAPM is nothing but the exam. That is the model CAPM describe the relationship Between the risk and the expected return and That Is Also used in the pricing of the risky securities. The general idea about the CAPM was Compensate investors need to be in to two ways: time value of the money and the risk.
The capital asset pricing model (CAPM) Also is used to calculate the required rate of return for any risky asset. Your can the required rate of return is the Increase in value You should expect to see based on the impact on the risk level of the asset.
The Capital Asset Pricing Model of the - Definition and Underlying Assumptions - In the finance, one of the Most Important thing is to remember Is That return is a function of the risk. This Means That the more risk you can take and the higher your potential return Should be Increased to offset your chance for the loss.
Like all financial models the Capital Asset Pricing Model Certain depends on the acceptance. Originally, there Were all nine assumptions,, Although more focus on the recent work in the financial theory These rules have relaxed. Were The Original assumptions: