# CAPM (Capital Asset Pricing Model)

*Risk & Portfolio — Finicade finance glossary*

The classic model for the return an asset should offer: the risk-free rate plus its beta times the market's risk premium. It says you're only rewarded for market risk you can't diversify away, not for risk you could have removed.

**Also known as:** capital asset pricing model

**Related terms:** [Beta](https://finicade.com/glossary/beta), [Risk Premium](https://finicade.com/glossary/risk-premium), [Systematic Risk](https://finicade.com/glossary/systematic-risk), [Efficient Frontier](https://finicade.com/glossary/efficient-frontier)

**Taught in:** Charter Climb — Cost of Capital & Structure

Source: https://finicade.com/glossary/capm