Thousands of investors have told us they are confused by the investment jargon that is used by financial advisors. We also know some terms, that investors don't understand, are used by advisors as sales ploys. They establish themselves as experts when they define a term you may not understand.
There is an alternative. We have defined more than 1,500 commonly used financial terms. Look-up a definition by entering the term in the search engine or using the alphabetical search service.
Definition of 'Capital Asset Pricing Model'
Sophisticated model that is based on expected risk and expected return. The theory is rational investors will not take risks unless there is sufficient return to justify taking the risks. If the return premium isn't available, rational investors will invest in a risk-free alternative such as Treasury Bills.