Question 1

What does Beta represent in CAPM?

Accepted Answer

Beta measures how much an asset's price moves in relation to the market. A beta greater than 1 means the asset is more volatile than the market.

Question 2

Is CAPM always accurate?

Accepted Answer

CAPM is a theoretical model. It assumes efficient markets and rational investors, so while it is a useful benchmark, it does not account for all market anomalies or individual company nuances.

Question 3

Can I use this calculator for any asset?

Accepted Answer

Yes, it can be applied to individual stocks, portfolios, or even entire business ventures, provided you can estimate the appropriate Beta value.

CAPM Calculator