CAPITAL ASSET PRICING MODEL
capital asset pricing model: translation
( CAPM)
An economic theory that describes the relationship between risk and expected return, and serves as a model for the pricing of risky securities. The CAPM asserts that the only risk that is priced by rational investors is systematic risk, because that risk cannot be eliminated by diversification.The CAPM says that the expected return of a security or a portfolio is equal to the rate on a risk-free security plus a risk premium multiplied by the asset's systematic risk. Theory was invented by William Sharpe (1964) and John Lintner (1965). The early work of Jack Treynor is was also instrumental in the development of this model. Bloomberg Financial Dictionary
* * *
capital asset pricing model capital asset pricing model ➔ model
* * *
► See CAPM.
* * *
capital asset pricing model UK US noun [C] (ABBREVIATION CAPM)
► FINANCE »
The article examines the capital asset pricing model for the Greek stock market using weekly stock returns from 100 companies listed on the Athens stock exchange.