How to Use the Capital Asset Pricing Model (CAPM) to Invest Wisely

The Capital Asset Pricing Model (CAPM) is a mathematical model used to calculate the expected return of an investment. The CAPM takes into account the risk of the investment, and can be used to help investors make wise choices about where to put their money.

The CAPM is based on the idea that investors require a higher return on investments that are riskier. The CAPM measures risk by looking at the volatility of an investment, as well as its correlation with the overall market.

The CAPM can help investors determine whether an investment is worth taking on more risk for a higher potential return, or if it would be wiser to invest in a less risky option.

Knowing how to use the CAPM is an important tool for all investors. In this video, you will learn how to use the CAPM to calculate the expected return on an investment, and how to use it to make informed decisions about where to invest your money.

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