Financial Calculators
CAPM Calculator
Calculate expected return, risk-free rate, beta, or market return using the Capital Asset Pricing Model locally in your browser.
Find the expected return from risk, beta, and market premium.
Choose what to solve for: expected return, risk-free rate, beta, or market return. Then enter the other three values. The calculator uses the CAPM formula: Expected Return = Risk-Free Rate + Beta × (Market Return − Risk-Free Rate). For example, with a 4.5% risk-free rate, 1.2 beta, and 10% market return, the expected return is 4.5 + 1.2 × (10 − 4.5) = 11.1%. This private browser estimate assumes the CAPM holds and does not account for taxes, fees, or other risk factors; it is not financial, investment, or tax advice. Your values are not uploaded or stored.
Frequently Asked Questions
Everything you need to know about this tool, how it works, and privacy.
What is the Capital Asset Pricing Model (CAPM)?
CAPM describes the relationship between systematic risk and expected return for assets. It states that the expected return on an asset equals the risk-free rate plus the asset's beta multiplied by the market risk premium: Expected Return = Rf + β × (Rm − Rf).
What is beta in CAPM?
Beta (β) measures an asset's sensitivity to market movements. A beta of 1 means the asset moves with the market. Beta greater than 1 indicates higher volatility than the market, and beta less than 1 indicates lower volatility.
What is the market risk premium?
The market risk premium is the difference between the expected market return and the risk-free rate: Rm − Rf. It represents the extra return investors demand for holding a risky market portfolio instead of risk-free assets.
What risk-free rate should I use?
Common choices include the yield on 10-year or 3-month government bonds (e.g., U.S. Treasuries) matching your investment horizon. The rate should be in the same currency as your expected return and expressed as an annual percentage.
Can I use CAPM to find the cost of equity for WACC?
Yes. The cost of equity (Re) in WACC is often estimated using CAPM. This calculator can solve for expected return given the risk-free rate, beta, and market return, providing a cost-of-equity estimate for WACC calculations.
Is my data uploaded or stored?
No. All calculations run locally in your browser. CodeASystem does not upload or store the values you enter.