Pete Rathburn is a copy editor and fact-checker with expertise in economics and personal finance and over twenty years of experience in the classroom. The capital asset pricing model (CAPM) and the ...

The capital asset pricing model (CAPM) is a financial model used to determine a security's expected return considering its associated risk. Developed in the 1960s, CAPM has become an essential tool in ...

Steven Nickolas is a writer and has 10+ years of experience working as a consultant to retail and institutional investors. Thomas J. Brock is a CFA and CPA with more than 20 years of experience in ...

This article originally appeared in the fall 2019 issue of Morningstar Magazine. To learn more about Morningstar Magazine, please visit our corporate website. The Capital Asset Pricing Model is one of ...

A group of our advisors attended a conference this past fall sponsored by Dimensional Fund Advisors. In his talk, "Risk Dimensions of the Market," Eugene F. Fama reviewed the latest data on the ...

The capital asset pricing model (CAPM) helps estimate the cost of shareholder equity in capital budgeting. The model uses the risk-free rate, market return, and beta to assess expected returns. CAPM ...

The tradeoff for higher returns is higher risk — right? A new paper argues that factor investing challenges the 50-year-old Capital Asset Pricing Model (CAPM) developed by William Sharpe, which ...