Remove Beta Remove Market Risk Remove Systematic Risk Remove Weighted Average Cost of Capital
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What is the Capital Asset Pricing Model (CAPM)?

Andrew Stolz

When an investor buys a particular security, they consider the risk of that security relative to the riskiness of the overall market and adjust the equity risk premium up or down by using Beta. What Impacts the Capital Asset Pricing Model? Investments are exposed to two types of risk: systematic and unsystematic.