Business / Finance / Capital Budget: An economic theory that describes the relationship between risk and expected return, and serves as a model for the pricing of risky securities. The CAPM asserts that the only risk that is priced by rational investors is systematic risk, because that risk cannot be eliminated by diversification. The CAPM says that the expected return of a security or a portfolio is equal to the rate on a risk-free security plus a risk premium multiplied by the assets systematic risk. Theory was invented by William Sharpe (1964) and John Lintner (1965).
Capital Adjective Synonyms: chief, main, major, important, cardinal, central, principal, prime, primary, paramount, pre-eminent, foremost, leading
Capital Noun Synonyms: head, top, crown, cap
Business / Finance / Capital Requirements: Placing limits on the amount of new investment undertaken by a firm, either by using a higher cost of capital, or by setting a maximum on the entire capital budget or parts of it. MORE
Business / Accounting / Budget: A financial plan that summarizes future income and expenditures over a period of time. MORE