Explaining and Applying CAPM and Estimating Beta

This video covers the following learning objectives:

• Explain the Capital Asset Pricing Model (CAPM) and its relevance to investment and financing decisions

• Understand and interpret Beta as a measure of systematic market risk

• Estimate Beta using historical return data in Microsoft Excel

• Estimate Beta using a financial calculator (BA II Plus or HP 10BII) for exam and field applications

• Apply CAPM to calculate expected returns, cost of equity, and project hurdle rates

• Demonstrate how CAPM and Beta influence corporate finance, portfolio management, and risk management decisions

• Meet the learning expectations aligned with the CSC, CFA Level I, FRM, and CFP certification programs