Capital asset pricing model (CAPM)

{
  "id": "MLC-T-INS-000671",
  "term": "Capital asset pricing model (CAPM)",
  "field": "Insurance and risk management",
  "definition": "A financial model that calculates the expected return on an investment, given its systematic risk. It posits that the expected return equals the risk-free rate plus a risk premium, which is the asset's beta multiplied by the market risk premium. In insurance, it can be used to evaluate the cost of equity for an insurer or to price certain financial risks.",
  "abbreviation": "CAPM",
  "url": "https://mlchart.com/terminology/insurance/capital-asset-pricing-model-capm/"
}