The CAPM shows that the expected return for a particular asset depends on the reward for bearing systematic risk.

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The Capital Asset Pricing Model (CAPM) posits that the expected return on an investment is equal to the risk-free rate plus a risk premium, which is based on the beta of the investment times the expected market return minus the risk-free rate. This model shows that the expected return on an asset depends primarily on its exposure to systematic risk, as measured by beta, rather than unsystematic risk, which can be diversified away.

The CAPM Shows That the Expected Return for a Particular