What does Capital Asset Pricing Model mean? Read on to discover the definition & meaning of the term Capital Asset Pricing Model - to help you better understand the language used in insurance policies.
Capital Asset Pricing Model
An asset valuation model that describes the relationship between expected risk and expected return for marketable assets. The CAPM states that the intercept of a regression equation between an asset's returns and the returns of systematic factors equals 0 percent in an efficient market, but it does not necessarily assume a single source of systematic risk.
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