Capital Asset Pricing Model (CAPM) Calculator

In finance and economics, the Capital Asset Pricing Model (CAPM) is used to calculate the expected return of a stock based on the risk-free rate, the expected return of the market, and the stock’s beta. The following formula is used to calculate the expected return:

Expected return = B*(E – R) + R

where

R is the risk-free rate.
E is the expected return of the market.
B is the stock’s beta.

To calculate the expected return for a given stock, simply fill in the values below and then click the “Calculate” button.

Expected return of the market (%) Risk-free rate (%) Beta for stock

Expected return: 11.90%

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Zach

Zach is the author behind Four Pillar Freedom, a blog that teaches you how to build wealth and gain freedom in life.

He quit his day job as a data scientist in 2019 because he was able to earn enough income from profitable websites to replace his salary. He now teaches people how to start and grow their own profitable websites from scratch in the Income Community.

Zach's favorite free financial tool he's been using since 2015 to manage his net worth is Personal Capital. Each month he uses their free Investment Checkup tool and Retirement Planner to track his investments and ensure that he's on the fast track to financial freedom.

His favorite investment platform is M1 Finance, a site that allows him to build a custom portfolio of stocks for free, has no trading or maintenance fees, and even allows him to set up automated target-allocated investments.

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