Beta and CAPM (Calculations for CFA® and FRM® Exams)
Learn Beta and the Capital Asset Pricing Model (CAPM) step-by-step. We define beta as systematic risk, clear up common misconceptions (beta ≠ correlation), derive the two beta formulas (using covariance and correlation), interpret beta as a multiplier, and finish with worked examples. Then we apply CAPM to compute expected return from risk-free rate, market risk premium, and beta.
What you’ll learn:
Beta: definition, intuition, and formulas
Correlation vs covariance and how they feed into beta
Interpreting beta
CAPM assumptions and caveats
CAPM formula and exam-style calculations
AnalystPrep's Concept Capsules for CFA® and FRM® Exams
This series of video lessons is intended to review the main calculations required in your CFA and FRM exams.
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