DEFINITION of 'International Capital Asset Pricing Model (CAPM)'
A financial model that extends the concept of the capital asset pricing model (CAPM) to international investments. The standard CAPM pricing model is used to help determine the return investors require for a given level of risk. When looking at investments in an international setting, the international version of the CAPM model is used to incorporate foreign exchange risks (typically with the addition of a foreign currency risk premium) when dealing with several currencies.
INVESTOPEDIA EXPLAINS 'International Capital Asset Pricing Model (CAPM)'
CAPM is a method for calculating anticipated investment risks and returns. The model was developed by economist and Nobel Memorial Prize winner William Sharpe. It says that the return on an investment should equal its cost of capital and that the only way to earn a higher return is by taking on more risk. Investors can use CAPM to evaluate the attractiveness of potential investments. There are several different versions of CAPM, of which international CAPM is just one.

Cost Of Capital
The required return necessary to make a capital budgeting project, ... 
Fama And French Three Factor Model
A factor model that expands on the capital asset pricing model ... 
Capital Asset Pricing Model  CAPM
A model that describes the relationship between risk and expected ... 
Equity Risk Premium
The excess return that an individual stock or the overall stock ... 
Purchasing Power Parity  PPP
An economic theory that estimates the amount of adjustment needed ... 
Beta
A measure of the volatility, or systematic risk, of a security ...

Bonds & Fixed Income
Understanding The Sharpe Ratio
This simple ratio will tell you how much that extra return is really worth. 
Investing Basics
Beta: Know The Risk
Beta says something about price risk, but how much does it say about fundamental risk factors? Find out here. 
Fundamental Analysis
Taking Shots At CAPM
Find out why many investors think the capital asset pricing model is full of holes. 
Options & Futures
How Risk Free Is The RiskFree Rate Of Return?
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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
Catch On To The CCAPM
The consumption capital asset pricing model smoothes over some of CAPM's weaknesses to make sense of risk aversion. 
Forex Education
Reduce Your Risk With ICAPM
Avoid unnecesary risks involved in CAPM calculations by also incorporating ICAPM into the mix. 
Economics
Understanding Perpetuity
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Chart Advisor
Is Now the Time to Invest in North America?
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Investing
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