The Capital Asset Pricing Model

  • David Ruppert
  • David S. Matteson
Part of the Springer Texts in Statistics book series (STS)


The CAPM (capital asset pricing model) has a variety of uses. It provides a theoretical justification for the widespread practice of passive investing by holding index funds. The CAPM can provide estimates of expected rates of return on individual investments and can establish “fair” rates of return on invested capital in regulated firms or in firms working on a cost-plus basis.


Risk Premium Risky Asset Excess Return Capital Asset Price Model Weighted Portfolio 
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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • David Ruppert
    • 1
  • David S. Matteson
    • 2
  1. 1.Department of Statistical Science and School of ORIECornell UniversityIthacaUSA
  2. 2.Department of Statistical Science Department of Social StatisticsCornell UniversityIthacaUSA

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