CAPM Calculator
Parameter | Description | Example Value |
---|---|---|
Risk-Free Rate | The return on risk-free investments (e.g., government bonds). | 2% |
Beta | The measure of volatility, or systemic risk, of a security or portfolio in comparison to the market as a whole. | 1.5 |
Market Risk Premium | The additional return expected from holding a risky market portfolio instead of risk-free assets. | 6% |
Expected Return | The return expected on the investment (Risk-Free Rate + Beta * Market Risk Premium). | 11% |