CAPM Expected Return Calculator
Enter the risk-free rate, the stock's beta and the expected market return to calculate its CAPM expected return.
CAPM Expected Return Calculator
Calculate a stock's expected return using the Capital Asset Pricing Model (CAPM).
This calculator provides an estimate for general informational purposes only. It is not a substitute for professional financial, mechanical or engineering advice.
CAPM estimates a stock's expected return by starting from the risk-free rate and adding a risk premium scaled by the stock's beta and the market's expected excess return over the risk-free rate.
Example
- With the default values shown above, this calculator returns: Expected Return (CAPM) ≈ 10.00.
Frequently Asked Questions
What is the formula?
Expected Return = Risk-Free Rate + Beta × (Expected Market Return − Risk-Free Rate).
What does beta represent?
Beta measures a stock's volatility relative to the overall market: a beta of 1 moves in line with the market, above 1 is more volatile than the market, and below 1 is less volatile.