According to the CAPM, the required return of an asset is the sum of risk-free rate of return and beta times the risk premium.

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This is the formula of CAPM (Capital Asset Pricing Model) which calculates the required return of an asset based on its sensitivity to market risk (beta). It states that the expected return of an asset can be calculated by adding the risk-free rate to the product of the asset's beta and market risk premium.

According to the CAPM, the Required Return of an Asset