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Economics & Business · Finance & Investment
Risk, Return & CAPM Explorer
Students plot the CAPM security market line to see how beta determines expected return, then switch to a two-asset portfolio view to discover how correlation between assets reduces risk below the weighted average. The full interactive is available to licensed Education Universe users.
Undergraduate, ProfessionalExplorerRisk & Return
Learning outcomes
- Use CAPM to calculate expected return.
- Interpret beta.
- Explain how diversification reduces portfolio risk.
Teaching guidance
Ask students to predict portfolio risk for perfectly correlated assets, then lower the correlation.
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Risk, Return & CAPM Explorer is one of the licensed interactives in The Education Universe. This page describes it; teachers use it in lessons and classes with a licence or the free trial.