Anshika Sharma India 3k Questions 2k Answers 3 Best Answers 4k Points View Profile0 Anshika Sharma Asked: June 13, 20202020-06-13T15:43:53+05:30 2020-06-13T15:43:53+05:30In: Stock MarketWhat Are The Assumptions On Which Capm Is Based? What Are The Essential Elements Of Capm?0 What Are The Assumptions On Which Capm Is Based? What Are The Essential Elements Of Capm?gk ShareFacebook1 AnswerVotedOldestRecentAnshika Sharma India 3k Questions 2k Answers 3 Best Answers 4k Points View Profile Anshika Sharma Added an answer on June 13, 2020 at 3:44 pm CAPM (Capital Asset Pricing Model) is a risk and return model. It predicts the relationship between risk of an asset and its expected result. This model assumes that:Investors are risk averse. Investors are known with all the market fluctuations and information. There are no restrictions and transaction costs on investment. Information available in the market will be digested by the capital markets. Investors have identical time horizons. Investors have homogeneous expectations about risk and return of securities. The essential elements of CAPM are:Risk free rate Market Risk Premium Beta of the security0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerLeave an answerCancel reply Featured image Select file Browse Save my name, email, and website in this browser for the next time I comment.