Abstract
The capital asset pricing model (CAPM) is an influential paradigm in financial risk management. It formalizes mean-variance optimization of a risky portfolio given the presence of a risk-free investment such as short-term government bonds. The CAPM defines the price of financial assets according to the premium demanded by investors for bearing excess risk.
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APA
Chen, J. M. (2021). The Capital Asset Pricing Model. Encyclopedia, 1(3), 915–933. https://doi.org/10.3390/encyclopedia1030070
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