What is the 'Consumption Capital Asset Pricing Model  CCAPM'
A financial model that extends the concepts of the capital asset pricing model (CAPM) to include the amount that an individual or firm wishes to consume in the future. The CCAPM uses consumption measures, in terms of a consumption beta, in its calculation of a given investment's expected return.
To illustrate:
Next Up
BREAKING DOWN 'Consumption Capital Asset Pricing Model  CCAPM'
In its simplest form, the CCAPM differs from the CAPM by only the beta coefficient used in the calculation. The beta for consumption attempts to measure the covariance between an investor's ability to consume goods and services from investments, and the return from a market index.
In practice, the CCAPM is used less frequently than the CAPM, and should probably only be used on a theoretical basis.
RELATED TERMS

International Capital Asset Pricing ...
A financial model that extends the concept of the capital asset ... 
Capital Asset Pricing Model  CAPM
A model that describes the relationship between risk and expected ... 
Beta
Beta is a measure of the volatility, or systematic risk, of a ... 
International Beta
Better known as "global beta", international beta is a measure ... 
Roll's Critique
An economic idea that suggests that it is impossible to create ... 
Anomaly
A term describing the incidence when the actual result under ...
Related Articles

Fundamental Analysis
Catch On To The CCAPM
The consumption capital asset pricing model smoothes over some of CAPM's weaknesses to make sense of risk aversion. 
Fundamental Analysis
The Capital Asset Pricing Model: An Overview
CAPM helps you determine what return you deserve for putting your money at risk. 
Fundamental Analysis
Capital Asset Pricing Model  CAPM
CAPM is a model that describes the relationship between risk and expected return. 
Options & Futures
Financial Concepts: Capital Asset Pricing Model (CAPM)
Pronounced as though it were spelled "capm", this model was originally developed in 1952 by Harry Markowitz and finetuned over a decade later by others, including William Sharpe. The capital ... 
Professionals
Expected And Unexpected Returns
Find out how to apply this to your portfolio. 
Investing
The Capital Asset Pricing (CAPM) Model: Pros and Cons
CAPM, while criticized for its unrealistic assumptions, provides a more useful outcome than either the DDM or WACC in many situations. 
Investing Basics
Valuation Models: Apple’s Stock Analysis With CAPM
The capital asset pricing model, or the CAPM, estimates the expected return of an asset based on the systematic risk of the asset’s return. 
Fundamental Analysis
Taking Shots At CAPM
Find out why many investors think the capital asset pricing model is full of holes. 
Fundamental Analysis
Is Apple's Stock Over Valued Or Undervalued?
Despite several drawbacks, the CAPM gives an overview of the level of return that investors should expect for bearing only systematic risk. Applying Apple, we get annual expected return of about ... 
Professionals
The Capital Asset Pricing Model (CAPM)
CFA Level 1  The Capital Asset Pricing Model (CAPM). Learn the theory and formulas behind the capital asset pricing model. Shows how security valuation relates to CAPM and the characteristic ...
RELATED FAQS

What is the formula for calculating the capital asset pricing model (CAPM)?
Learn about the capital asset pricing model, or CAPM, and how this formula is used to determine the expected rate of return ... Read Answer >> 
How do I use the CAPM (capital asset pricing model) to determine the cost of equity?
Learn about the elements of the capital asset pricing model, and discover how to use this formula to calculate a business' ... Read Answer >> 
How does beta measure a stock's market risk?
Learn how beta is used to measure risk versus the stock market, and understand how it is calculated and used in the capital ... Read Answer >> 
How do I calculate the cost of equity using Excel?
Learn how to calculate the cost of equity in Microsoft Excel using the capital asset pricing model, or CAPM, including brief ... Read Answer >> 
According to the CAPM, the expected return on a stock, that is part of a portfolio, ...
A. the covariance between the stock and the market. B. the variance of the market. C. the market risk premium. D. ... Read Answer >> 
How is the Capital Asset Pricing Model (CAPM) represented in the Security Market ...
Learn about the capital asset pricing model and the security market line and how the model is used in the calculation and ... Read Answer >>