CAPM Beta Calculator







Formula

The formula to calculate the CAPM beta is:

\[ B = \frac{ER_i - r_f}{ER_m - r_f} \]

Where:

CAPM Beta Definition

A CAPM beta is a coefficient used in the capital asset pricing model to describe the ratio of the return of an investment compared to the return of the market relative to a risk-free investment.

Example Calculation

Example:

Step 1: Calculate the beta:

\[ B = \frac{12 - 2}{8 - 2} = \frac{10}{6} \approx 1.67 \]