One of the key insights of the CAPM is that it answers an important investment question: "What is the expected return if I purchase security XYZ?" The assumption that Sharpe built into the model is ...

In the 1960s, Jack Treynor, William F. Sharpe, John Lintner, and Jan Mossin developed the capital asset pricing model (CAPM) to determine the theoretical appropriate rate that an asset should return ...

Andy Smith is a Certified Financial Planner (CFP®), licensed realtor and educator with over 35 years of diverse financial management experience. He is an expert on personal finance, corporate finance ...

A group of our advisors attended a conference this past fall sponsored by Dimensional Fund Advisors. In his talk, "Risk Dimensions of the Market," Eugene F. Fama reviewed the latest data on the ...

Barberis, Nicholas, Robin Greenwood, Lawrence Jin, and Andrei Shleifer. "X-CAPM: An Extrapolative Capital Asset Pricing Model." Journal of Financial Economics 115, no. 1 (January 2015): 1–24.

This article originally appeared in the fall 2019 issue of Morningstar Magazine. To learn more about Morningstar Magazine, please visit our corporate website. The Capital Asset Pricing Model is one of ...