Capital Asset Pricing Model

This video discusses the Capital Asset Pricing Model (CAPM).

The Capital Asset Pricing Model can be used to determine the expected rate of return for a security. Here is the formula for the Capital Asset Pricing Model:

Expected Return = Risk-free Rate + Beta * (Expected Market Return - Risk-free Rate)

The expected return of a security is thus a function of: (1) the risk-free rate, (2) the systematic risk of the security (beta), and (3) the market risk premium (the expected market return minus the risk-free rate).—
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[Valentin-ocnh]

BEST economics tutor on youtube, by a LOT

[BrandyMullens]

legit spent an 30 mins trying to understand this with uni content, and youve explained in 4 mins

[riseandthrive-uh]

Ur literally a blessing sir! Before stumbling upon this channel I was actually really confused abt how to gain more knowledge on finance. I thought I just needed to mindlessly do courses but now I am blessed with this channel😊. Keep up the good work Michael✌️

[tinwav]

love you, my lecturer over complicates this stuff....

[tishtosh]

Your videos have saved me in my accounting and financing classes. THANK

[hmmm]

Love these tutorials, straight forward, to the point and well explained

[aworldenslaved]

Me: clicks like b4 even watching video because edspira has the best explanations out there.

[filipstraka]

omg thank you so much you've helped me big time with revising for my finance finals... Bless your soul

[pitt]

Great video! Thank you man, that's exactly what I needed!

[mohebfaghiri]

Nice explanation of CAPM. But, you may also want to talk about the low volatility anomaly here too!

[jordiortega]

Thank goodness for this video. Lifesaver! Thx!

[hamadaali]

Keep posting bec Cpa waiting for new more video thank you very much

[richardsalley]

When choosing a "risk free" rate, should the rate be based on how long you expect to hold the security. For example, if I plan to hold the security for at least 10 years, should I used the 10-year treasury rate?
Because there is usually a large difference in the treasury rates, say on 3 versus 10 or even 20 or 30 year rates, and this will affect the calculation.
And, if I use a 10 year treasury rate, should I also use a Market rate based on a ten year assumption as well?

[lsteven]

Can you discuss how the risk of pandemics such as COVID-19 fits into the capital assets pricing model?

[qiaoxinwong]

Hi, may i know the Beta in CAPM, can be either BETA ASSET or BETA EQUITY? Is it depends on the cost of equity ( geared or ungeared)?

[jimcuddy]

so the expected return of market is just the average of say daily or weekly return over X years

[gabe]

and how do you determine the "market expected return"

[Business-cy]

Please, could you me talk what use app for writing this video?

[jackrussel]

Sorry but which investment risk free give me 1.25% return ?

[Nakameguro]

Intuitively, what's the difference between CAPM Beta and Beta vs an asset like the S&P? It's a bit confusing because both can be calculated using linear regressions.