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 ... 
Robert C. Merton
An American economist who won the 1997 Nobel Memorial Prize in ... 
Capital Asset Pricing Model  CAPM
A model that describes the relationship between risk and expected ... 
Harry Markowitz
A Nobel Memorial Prize winning economist who devised the modern ... 
Sharpe Ratio
The Sharpe Ratio is a measure for calculating riskadjusted return, ...

Fundamental Analysis
Taking Shots At CAPM
Find out why many investors think the capital asset pricing model is full of holes. 
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 ... 
Markets
Sharpe Ratio
Learn about this ratio developed by Nobel laureate William F. Sharpe to measure riskadjusted performance. 
Fundamental Analysis
The Capital Asset Pricing Model: An Overview
CAPM helps you determine what return you deserve for putting your money at risk. 
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. 
Bonds & Fixed Income
Find The Highest Returns With The Sharpe Ratio
Learn how to follow the efficient frontier to increase your chances of successful investing. 
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. 
Investing Basics
3 Ways To Evaluate the Performance of Alternatives
Learn about three ways to measure the performance of alternative investments. See how the commonly used Sharpe ratio has drawbacks in measuring volatility.

What is a good Sharpe ratio?
Understand how the Sharpe ratio is calculated, and its significance and use for investors in evaluating the performance of ... Read Answer >> 
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 >> 
How do you the calculate Sharpe ratio in Excel?
Learn how to use Microsoft Excel to calculate the Sharpe ratio, an investing tool useful for assessing the relationship between ... 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 >> 
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 >>