The CAPM estimates the required rate of return on a stock held as part of a well diversified portfolio.

Name: The CAPM estimates the required rate of return on a stock held as part of a well diversified portfolio.
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The Capital Asset Pricing Model (CAPM) is used to estimate the required rate of return on a stock, assuming it is held as part of a well-diversified portfolio, by accounting for the stock's sensitivity to non-diversifiable risk.

The CAPM Estimates the Required Rate of Return on a Stock