CAPM overview — purpose?
Estimate asset's expected return based on risk.
Risk-Return — principle?
Higher risk demands higher expected return.
CAPM — purpose?
Estimate expected asset returns based on risk.
Beta — role?
Measures asset sensitivity to market movements.
Systematic risk — definition?
Market-wide risk affecting all assets.
Unsystematic risk — definition?
Asset-specific risk, diversifiable.
Expected return — calculation?
Using historical or probabilistic methods.
CAPM formula components?
Risk-free rate, beta, market risk premium.
Market sensitivity — measure?
Beta coefficient.
Answer 8 questions on Understanding Beta and Market Risk.
1. When was the CAPM formally published or established in academic literature?
2. What does the risk-return relationship fundamentally mean in investments?
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