CAPM, Beta, and Pricing Models

CAPM, beta, and pricing model pages explain how expected return is linked to market exposure and benchmark risk.

Use this section for beta measures, security-market and capital-market lines, market-portfolio logic, and CAPM-style pricing relationships.

In this section

• Alpha vs Beta: Understanding Excess Return and Systematic Risk
  Alpha measures the excess return of an asset relative to its expected return, while Beta measures its systematic risk. This comprehensive guide explains their definitions, types, importance, and applications in finance.
• Capital Market Line (CML): Meaning and Interpretation
  Learn what the capital market line shows and why it links the risk-free
• CAPM: Capital Asset Pricing Model
  The Capital Asset Pricing Model (CAPM) is a foundational financial model that describes the relationship between systematic risk and expected return for assets, particularly stocks.
• Market Portfolio: The Theoretical Portfolio of All Risky Assets
  Learn what the market portfolio represents in finance theory and why it matters in CAPM, beta, and diversification discussions.
• Security Market Line (SML): Graphical Representation of CAPM
  Explore the definition, characteristics, and significance of the Security Market Line (SML) as a graphical representation of the Capital Asset Pricing Model (CAPM). Understand its role in finance and investment, along with practical examples.
• Unlevered Beta: Definition, Formula, Examples, and Calculation
  A comprehensive guide to understanding Unlevered Beta, including its definition, calculation methods, examples, and its importance in assessing market risk without the impact of debt.
• Zero-Beta Portfolio: Definition, Formula, and Example
  A comprehensive guide to understanding a zero-beta portfolio, covering its definition, formula, types, examples, and practical applications in finance.