Finance ABC

Welcome back to Finance ABC! I’m your host, Emma Lai, and today we’re taking on a classic and widely-used concept in finance: the Capital Asset Pricing Model, or CAPM for short. The CAPM might sound a little intimidating at first, but it’s a powerful tool in finance, one that helps investors and analysts make decisions about risk and return when it comes to investing in different assets. CAPM sits at the heart of modern portfolio theory, so if you’ve ever wondered how investors decide if an asset is worth the risk, or how they determine what kind of return they should expect from an investment, CAPM is a great place to start.