CAPM expected return
uses market systemic risk to explain equilibrium expected excess returns.
symbols, variables and units
R_i, R_f, R_m: rate of return in the same cycle; β_i: market covariance/market variance.
applicable conditions and boundaries
Theoretical equilibrium model, strong assumption; not guaranteed income.
formula source code
The following is a copyable LaTeX expression.
\mathbb E[R_i]=R_f+\beta_i(\mathbb E[R_m]-R_f)
Reference and Extended Learning
MIT OpenCourseWare · Finance Theory ↗is organized according to model definition and assumptions. Please check actual conditions and original literature before engineering, research and clinical use.
CAPMAsset Pricing