28. CAPM: Beta

Posted by in Module 4: Risk and Return

After learning about the Capital Asset Pricing Model (CAPM) and how it uses the market risk premium (or equity risk premium) and Beta to calculate the expected return on a stock, we will now dive deeper into what Beta is, how it can be calculated, and how we can interpret it to better understand how risky or sensitive a stock’s return is relative to the market return.