» Capital Asset Pricing Model (CAPM)

Initial Data


Risk-free interest rate (rf)
 %
Investment's Beta (βi)
Expected annual return of the market benchmark (E(rm))
 %

Result


Expected annual return on investment (E(ri))
 %
 
 

The capital asset pricing model (CAPM) is used to determine a theoretically appropriate required rate of return of an asset.

$$E(r_{i}) = r_{f} + \beta_{i} \times \left[E(r_{m}) - r_{f}\right]$$


Notice! Savings and investments are always related with risk (uncertainty) that returns vary. The result of the calculator can not in any event be interpreted as investment recommendation or advice. The actual return of the investment is affected by costs, charges and taxation, which are not taken into account in the calculation. On the basis of the calculation, one can not reliably predict the future value or return of the investment.