Aug 17, 2025 · Beta compares a security or portfolio's volatility or systematic risk to the market. If a stock is riskier than the market, it will have a beta greater than one. If a stock has a beta of …

Apr 7, 2025 · CAPM stands for “Capital Asset Pricing Model” and measures the cost of equity (Ke), or expected rate of return, on a particular security or portfolio. The CAPM formula is …

Dec 15, 2020 · In this guide, we’ll break down the CAPM beta formula, how to interpret beta values (including the beta of a risk-free asset), and walk through examples so you can …

This article focuses on CAPM Beta - its Definition, Formula, Calculate Beta in Excel. Learn how to calculate Beta, Unlevered Beta and Levered Beta.

The beta (denoted as “Ba” in the CAPM formula) is a measure of a stock’s risk (volatility of returns) reflected by measuring the fluctuation of its price changes relative to the overall …

Dec 8, 2025 · The following formula is used to calculate a CAPM beta. To calculate a CAPM beta, subtract the expected market return from the expected investment return, then divide by the …

Jul 17, 2025 · Beta measures a stock’s sensitivity to market movements, playing a fundamental role in evaluating risk and calculating the cost of capital, which in turn influences capital …

Apr 9, 2025 · The CAPM formula is based on the idea that investors demand a higher return for taking on more risk, and that the risk of an asset can be measured by its beta, which reflects …

β = Cov (Ri,Rm) / Var (Rm) where: This formula shows beta as a statistical measure of volatility relative to a benchmark. β = 1: The asset moves in lockstep with the market (average …

Jun 10, 2024 · Beta is a measure of an asset’s systematic risk, which is the risk that cannot be eliminated through diversification. It quantifies the volatility of an asset’s returns relative to the …