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

Andrew Stolz

Investments are exposed to two types of risk: systematic and unsystematic. Systematic risks are uncontrollable market risks due to unavoidable external factors. Systematic risks include interest rates, economic fluctuations, political unrest, pandemics, etc. E(r) = Rf + ??(Rm