## Capital Asset Pricing Method

The general idea behind Capital Asset Pricing Method is that the investors need to be compensated in one of the ways from time value of money and risk.

The time value of money is the risk-free rate in the formula and compensates the investors for investing in any investment over a given period of time. Rest of the formula concerns the risk and calculates the amount of compensation the investor should get for taking the additional risk.

## $$f+b[m-f]$$

f = Risk free rate m = Return on the market b = Beta rate of Security

ENTER THE VARIABLES TO BE USED IN THE FORMULA