(Solved): The Capital Asset Pricing Model (CAPM) is a model that: A financial model used to describe the rel ...

The Capital Asset Pricing Model (CAPM) is a model that: A financial model used to describe the relationship between the expected return of a stock and its systematic risk. Calculates the intrinsic value of a firm based on the present value of all future dividend payments. Graphical representation of the expected rate of return of an individual stock as a function of its Beta. Provides the set of all optimal portfolios and weights.