Arbitrage Capital Asset Pricing Model

The speaker discusses the difference between the security market line and the capital market line.

The speaker provides a detailed introduction to the capital asset pricing model, or CAPM.

Components of Capital Asset Pricing ModelThe Capital Asset Pricing Model (CAPM) is an equilibrium pricing model. The CAPM measures how much a given asset's return is affected by the movement of the overall market. The S&P 500 is often the benchmark index used in the model. The first component of the CAPM is the beta or risk associated with the asset.