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Capital Asset Pricing Model

CAPM. An 

Economic

 model for valuing stocks by relating 

Risk

 and expected return. Based on the idea that investors 

Demand

 additional 

Expected return

 (called the 

Risk

 premium) if asked to 

Accept

 additional risk.



Related Terms: 11

Ask

,

Accept

,

Base

,

Call

,

Demand

,

Economic

,

Expected return

,

Mode

,

Return

,

Risk

,

Risk premium


Other Related Pages:

Category: Stocks


Starting With: C


Semi Related Terms: 457  CLICK HERE TO VIEW

10-K

,

19c3 stock

,

Allowance for depreciation

,

Average accounting return

,

American Stock Exchange

,

Amortization of premium

,

Ask

,

Asked price

,

At par

,

All or any part

,

At best

,

At call

,

Adjustable rate preferred stock

,

Aggregate demand

,

Aggregate demand curve

,

All-risks coverage

,

At risk

,

Annual return

,

Add-on service

,

Accept

,

Action to quiet title

,

As is

,

Assignment to creditors

,

Attorney in fact

,

Asset-based finance

,

Asset-based lending

,

A shares

,

At the money

,

Across the board

,

Additional paid-in capital

,

Ad valorem

,

Amended return

,

Against the box

,

At the bell

,

At the close

,

At the figure

,

At the full

,

At the market

,

At the opening order

,

Automated Pricing and Reporting System

,

Away from the market

,

Accredited investor

,

Angel investor

,

Below the line

,

Best ask

,

Bid/ask spread

,

Bid-to-cover ratio

,

Brought over the wall

,

Buying on margin

,

Buy on close

,

Buy on opening

,

Buy the book

,

Base interest rate

,

Base period

,

Base-year analysis

,

Breaking the syndicate

,

By the book

,

Base rate

,

Benchmark risk

,

B shares

,

Buy and write

,

Borrowed stock

,

Broad-base index

,

Base

,

Beat the gun

,

Call

,

Call date

,

Called away

,

Called bond

,

Call price

,

Call protection

,

Call risk

,

Cap

,

Committee on Uniform Securities Identification Procedures

,

Common stock equivalent

,

Conversion premium

,

Credit risk

,

Call money rate

,

Cap rate

,

Council of Economic Advisers

,

Cyclical stock

,

Cash and carry trade

,

Certificated stock

,

Chasing the market

,

Cheapest to deliver

,

Country risk

,

Callable stock

,

Certificate of stock

,

Consumer stock

,

Control stock

,

Contract for deed

,

C shares

,

Call option

,

Call ratio backspread

,

Call swaption

,

Close to the money

,

Counterparty risk

,

Covered call

,

Cloud on title

,

Cash or Deferred Arrangement

,

Capital Asset Pricing Model

,

CAPM

,

Class A Shares

,

Class B Shares

,

Child and dependent care credit

,

Consolidated tax return

,

Cup and handle

,

Close a position

,

Cornering the market

,

Curbs in

,

Demand deposit

,

Deposit in transit

,

Del credere agency

,

Dividend discount model

,

Dividend in arrears

,

Demand

,

Demand elasticity

,

Demand inflation

,

Demand-pull inflation

,

Desk (the)

,

Diminishing return

,

Deal stock

,

Defensive stock

,

Demand rights

,

Distribution stock

,

Donated stock

,

De-escalation clause

,

De facto

,

Doing business as

,

Debtor in possession

,

Debtor-in-possession financing

,

Default risk

,

Demand loan

,

Due-on-sale clause

,

Deep in the money

,

Deep out of the money

,

Department of Housing and Urban Development

,

Dirty stock

,

Diversifiable risk

,

Dogs of the Dow

,

Downside risk

,

Economic surplus

,

Economic value

,

Equity risk premium

,

Escrowed to maturity

,

Event risk

,

Ex-legal

,

Either-or order

,

Economic

,

Economic cycle

,

Economic growth

,

Economic growth rate

,

Economic indicator

,

Economic sanctions

,

E-mini

,

Exchange for futures

,

Exchange for physical

,

Ex-pit transaction

,

Excluded risk

,

Employee Stock Purchase Plan

,

Employee stock repurchase agreement

,

Ex-all

,

Expected return

,

Ex-warrants

,

Economic rent

,

Ex-rights

,

Ex-rights date

,

First In First Out

,

Federal Savings and Loan Association

,

First call date

,

Flight to quality

,

Federal Call

,

Fill or kill

,

Front-ending an order

,

Forward P/E

,

Fee-for-service

,

Fixed premium

,

First preferred stock

,

Form 8-K

,

Form S-1

,

Full stock

,

Friends and family offering

,

Financial risk

,

Full faith and credit

,

Free and clear

,

Federal ID Number

,

Growth stock

,

G-7

,

General Agreement on Tariffs and Trade

,

G-8

,

Growth and income fund

,

Gather in the stops

,

Hit the bid

,

House call

,

Health Insurance Portability and Accountability Act

,

High-tech stock

,

Holder in due course

,

Head and shoulders

,

Hammering the market

,

Held at the opening

,

Holding the market

,

In escrow

,

Interest rate risk

,

In-house

,

Income stock

,

In line

,

Insurance premium

,

Internal Rate of Return

,

Investor relations

,

In intestacy

,

Interest rate cap

,

In play

,

In-process research and development

,

Income risk

,

I/O strip

,

In-service withdrawal

,

Idiosyncratic risk

,

Individual tax return

,

In and out

,

Individual investor

,

Institutional investor

,

In sympathy

,

In the tank

,

Jointly and severally

,

Jumping the gun

,

Joint and several liability

,

Joint and survivor annuity

,

Joint Stock Company

,

Joint return

,

Joint tax return

,

Last In First Out

,

Limited risk

,

Lending at a rate

,

Limit-on-close order

,

Law of demand

,

London International Financial Futures and Options Exchange

,

Level premium insurance

,

Loan stock

,

Legal risk

,

Lifetime cap

,

Loan-to-cost

,

Loan-to-value

,

Lock-in

,

Load-adjusted return

,

Large cap

,

Leading the market

,

Locked in

,

Long-term gain or loss

,

Level I quotes

,

Maintenance call

,

Make a market

,

Margin call

,

Market if touched order

,

Market on close order

,

Mark-to-market

,

Marginal propensity to consume

,

Marginable stock

,

Money at call

,

Mortgage risk

,

Market cap

,

Medium-cap

,

Micro cap

,

Mid cap

,

Mean return

,

Mode

,

Market return

,

New York Stock Exchange

,

No limit order

,

No quote

,

No-Fault

,

Nonvoting stock

,

No-Action Letter

,

Null and void

,

No-lien affidavit

,

No-load

,

Naked call

,

Non-qualified stock option

,

Non-statutory stock option

,

Nasdaq Small Cap Market

,

No-load stock

,

No book

,

Nonaccredited investor

,

Off the books

,

Over-the-Counter

,

On-floor order

,

On margin

,

Or better

,

Optionable stock

,

Original issue stock

,

On account

,

On-the-spot loan

,

Option premium

,

Out of the money

,

Old age, survivors, and disability insurance

,

On-balance volume

,

On close

,

One man picture

,

On open

,

On the opening

,

Pre-depreciation profit

,

Pre-tax profit margin

,

Profit and loss statement

,

Payment-in-kind security

,

Premium bond

,

Premium over bond value

,

Premium over conversion value

,

Price Value of a Basis Point

,

Provisional call feature

,

Payment for order flow

,

Preferred stock

,

Prior preferred stock

,

P&L

,

Provision for income taxes

,

Pre-existing conditions

,

Premium raid

,

Prepayment risk

,

Principal risk

,

Performance-based compensation

,

Premium income

,

Paid-in capital

,

Paid-in surplus

,

Passive investor

,

Percent held by institutions

,

Pre-syndicate bid

,

Private Investment in Public Equity

,

Point-and-figure chart

,

Painting the tape

,

Put/call ratio

,

Qualified institutional investor

,

Quick turn

,

Reports and Records

,

Return of capital

,

Return on Capital

,

Return on Invested Capital

,

Return on Total Assets

,

Risk adjusted return

,

Return

,

Risk

,

Reading the tape

,

Regulation D

,

Regulation G

,

Regulation T

,

Regulation U

,

Real economic growth rate

,

Round turn

,

Reinvestment risk

,

Restricted stock

,

Regulation A

,

Right to Know

,

Risk/return trade-off

,

Risk arbitrage

,

Risk-averse

,

Risk management

,

Risk neutral

,

Risk premium

,

Risk seeking

,

Return on Capital Employed

,

Rate of return

,

Real rate of return

,

Retail investor

,

Risk capital

,

Selling, General and Administrative Expenses

,

SG&A

,

Savings and Loan

,

S&L

,

Stock association

,

Securities and Exchange Commission

,

Stock buyback

,

Securities Investor Protection Corporation

,

Sell the book

,

Stock loan

,

Second preferred stock

,

Stock dividend

,

Systemic risk

,

Single stock futures

,

Second-to-die insurance

,

Single-premium life insurance

,

Stock life insurance company

,

Secondary stock

,

Stock bonus plan

,

Stock certificate

,

Stock Clearing Corporation

,

Stock consolidation

,

Stock exchange

,

Stock index

,

Stock market

,

Stock option

,

Stock option plan

,

Stock power

,

Stock screening

,

Stock swap

,

Stock symbol

,

Stock ticker

,

Sale and leaseback

,

Stock fund

,

Selling the spread

,

Synthetic stock

,

Savings Incentive Match Plan for Employees

,

Single-Premium Deferred Annuity

,

Small cap

,

Stock list

,

Story stock

,

Selling short against the box

,

Shorting against the box

,

S Corporation

,

Short-term gain or loss

,

Subchapter M

,

Subchapter S Corporation

,

Schedule C

,

Seek a market

,

Small investor

,

Sophisticated investor

,

S&P phenomenon

,

Stop and reverse

,

T-Bill

,

Term to maturity

,

Take a position

,

Total return

,

Trailing P/E

,

Total return index

,

Treasury Stock

,

Tenancy by the entirety

,

TED spread

,

Truth in Lending

,

Tenancy at will

,

Top hat plan

,

The Street

,

Timing the market

,

Taxable wage base

,

Tax base

,

Tax return

,

Take a bath

,

U.S. Government Agency Security

,

U.S. Savings Bond

,

U.S. Treasury

,

U.S. Treasury Bill

,

U.S. Treasury Bond

,

U.S. Treasury Note

,

U.S. Treasury Securities

,

Unlimited risk

,

Uncovered call

,

Unsystematic risk

,

Value stock

,

Vanishing premium policy

,

Vetoing stock

,

Voting stock

,

Waiver of premium

,

Watered stock

,

Widow-and-orphan stock

,

When, as, and if issued

,

X or XD

,

Year-To-Date

,

Yield to call

,

Yield to maturity

,

Yield to worst

,

Y shares

,

Zero-base budgeting


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