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.
BREAKING DOWN '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.

Capital Asset Pricing Model  CAPM
A model that describes the relationship between risk and expected ... 
Roll's Critique
An economic idea that suggests that it is impossible to create ... 
Fama And French Three Factor Model
A factor model that expands on the capital asset pricing model ... 
Anomaly
A term describing the incidence when the actual result under ... 
William F. Sharpe
An American economist who won the 1990 Nobel Prize in Economics, ... 
Consumption Capital Asset Pricing ...
A financial model that extends the concepts of the capital asset ...

Fundamental Analysis
Capital Asset Pricing Model  CAPM
CAPM is a model that describes the relationship between risk and expected return. 
Fundamental Analysis
Taking Shots At CAPM
Find out why many investors think the capital asset pricing model is full of holes. 
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 ... 
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. 
Fundamental Analysis
The Capital Asset Pricing Model: An Overview
CAPM helps you determine what return you deserve for putting your money at risk. 
Investing Basics
Valuation Models: Appleâ€™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 assetâ€™s return. 
Investing Basics
Introduction To International CAPM
ICAPM is one of several models used to determine the required return on an asset, discover its limitations and how to use it. 
Professionals
Expected And Unexpected Returns
Find out how to apply this to your portfolio. 
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 ... 
Forex Education
Reduce Your Risk With ICAPM
Avoid unnecesary risks involved in CAPM calculations by also incorporating ICAPM into the mix.

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 >> 
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 >> 
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 >> 
How does market risk affect the cost of capital?
Find out how market risk directly affects the total cost of capital, including how to use the capital asset pricing model ... Read Answer >>