CAPM stands for Capital Asset Pricing Model. The CAPM explains the connection between the expected return and risk of investing in an asset. It demonstrates that the expected return on security equals the risk-free return plus a risk premium based on the security's beta.
CAPM Formula-
Ra = Rrf + [Ba * (Rm - Rrf)]
Where:
Ra = Expected return on a security
Rrf = Risk-free rate
Ba = Beta of the security
Rm = Expected return of the market