One key result of applying the Capital Asset Pricing Model is that the risk and return of an individual security should be analyzed by how that security affects the risk and return of the portfolio in which it is held.

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This is one of the main principles of the Capital Asset Pricing Model. The model states that the expected return of an individual security is related to the risk-free rate, the market risk premium, and the security's beta, which measures its volatility compared to the overall market. However, the model also emphasizes that investors should consider how a security affects the risk and return of the overall portfolio in which it is held, rather than analyzing it in isolation. This is based on the idea that the risk and return of a portfolio depend not only on the individual securities it contains, but on how those securities interact with each other.

One Key Result of Applying the Capital Asset Pricing Model