DEFINITION of 'William F. Sharpe'
An American economist who won the 1990 Nobel Prize in Economics, along with Harry Markowitz and Merton Miller, for developing models to assist with investment decision making. Sharpe's capital asset pricing model (CAPM) calculates expected returns based on varied levels of risk and states that taking on more risk is necessary to earn a higher return. Corporations, institutions and pension fund managers have all used CAPM theory to manage risk.
BREAKING DOWN 'William F. Sharpe'
Sharpe was born in Boston in 1934. He earned his PhD from the University of California at Los Angeles and has taught at the University of Washington, the University of California at Irvine and Stanford University. He has been a consultant to numerous major corporations and founded the consulting firm William F. Sharpe Associates. Sharpe also developed the Sharpe ratio, another tool for analyzing investment performance.

Merton Miller
A prominent Chicago school economist. Miller was born in 1923 ... 
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 ... 
Douglass C. North
An American economist and winner of the 1993 Nobel Memorial Prize ... 
Homogeneous Expectations
An assumption in Markowitz Portfolio Theory that all investors ... 
BlackLitterman Model
An asset allocation model that was developed by Fischer Black ...

Investing
Capital Asset Pricing Model  CAPM
CAPM is a model that describes the relationship between risk and expected return. 
Managing Wealth
Sharpe Ratio
Learn about this ratio developed by Nobel laureate William F. Sharpe to measure riskadjusted performance. 
Investing
The Capital Asset Pricing Model: An Overview
CAPM helps you determine what return you deserve for putting your money at risk. 
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. 
Trading
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. 
Managing Wealth
Understanding The Sharpe Ratio
This simple ratio will tell you how much that extra return is really worth. 
Trading
How The Sharpe Ratio Can Oversimplify Risk
When it comes to hedge funds, this measure is not reliable on its own. 
Trading
Reduce Your Risk With ICAPM
Avoid unnecesary risks involved in CAPM calculations by also incorporating ICAPM into the mix. 
Investing
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 ... 
Investing
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.

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 >> 
What is the difference between the Sharpe ratio and alpha?
Use alpha and the Sharpe ratio to evaluate mutual funds by comparing their riskadjusted returns. Learn what modern portfolio ... Read Answer >> 
What is the difference between a Sharpe ratio and a Sortino ratio
Understand the differences between the Sharpe ratio and the Sortino ratio, two riskadjusted return on investment calculations, ... Read Answer >> 
How can I use alpha in conjunction with the Sharpe Ratio?
Take a deeper look at the differences between alpha and the Sharpe ratio, two mutual fund performance measures based on modern ... 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 is the expected market return determined when calculating market risk premium?
Find out how the expected market return rate is determined when calculating market risk premium and how these figures are ... Read Answer >>