In this video we'll explain what the Capital Asset Pricing Model (CAPM for short) is, and how is used in practice by finance practitioners.
According to the C.A.P.M, or CAPITAL ASSET PRICING MODEL, the return you can expect from a stock is equal to the risk-free rate + the market risk premium scaled by a factor called beta, which measures the market risk of the stock you are analysing.
Recommended Apps
stockpick.pxf.io/PyXDkj
I recommend StockPick for quick, easy-to-digest stock insights and market news. Watch short videos from experts to stay informed and make better investment decisions without the hassle.
Chapters
0:00 intro
0:15 the risk free rate
0:29 why risk-free?
0:43 the market risk-premium
1:25 what beta is and what it measures
2:02 a negative beta
2:24 the security market line
2:50 pricing Amazon using the CAPM
3:59 security market line as a pricing tool
4:43 applications
#CAPMexplained #WhatistheCAPM #CapitalAssetPricingModel
