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maxwellcpareview — What Is the Capital Asset Pricing Model

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Published: 2023-01-18 06:58:04 +0000 UTC; Views: 117; Favourites: 0; Downloads: 0
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The risk-free rate is the return on an investment that is guaranteed to pay us back (e.g., u.s. Treasury bills). In our example, imagine that we could invest in u.s. Treasury bills and receive a 1% return. If we didn’t invest in risk-free investments, we could invest in the stock market and receive a 7% return. A 1% risk-free return or a 7% risk return.

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