Calculating CAPM is meant to establish the so-called "efficient frontier." That is, it helps identify the highest potential return for a given level of risk or the lowest level of risk for a ...

Reviewed by Thomas J. Catalano Fact checked by Ryan Eichler What Is the Capital Asset Pricing Model (CAPM)? Corporate accountants and financial analysts often use the capital asset pricing model (CAPM ...

One simple but powerful method investors can use to assess the risk and reward of a stock portfolio is using the Capital Asset Pricing Model, or CAPM, model for expected returns.