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CAPM Calculator

Answers the Question

How much interest should I demand for a given level of risk?

Calculator for CAPM

 

What Is the CAPM?

High interest rates can be very tempting for investors eager to earn high returns. It's not enough to look at how much is being offered, however. One must also consider the risk of each investment.

In general, the higher the risk of an investment, the greater the return that must be promised.

Fortunately, the CAPM (capital asset pricing model) lets people figure out whether the offered rate makes up for the lessened safety of many offerings.

It uses three variables:

Why Is it Important?

Formula(s) to Calculate CAPM

Common Mistakes

Additional Business & Financial Calculators Available