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Risk-Free Rate
The theoretical rate of return of an investment with zero risk, often represented by the yield on government bonds like U.S. Treasury notes.
Expected Rate
The rate of return anticipated on an investment or asset based on historical data or specified models.
CAPM
Capital Asset Pricing Model, a model that describes the relationship between systematic risk and expected return for assets, particularly stocks.
Risk Premium
An expected return in excess of that on risk-free securities. The premium provides compensation for the risk of an investment.
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