CAPM can be used to help you build a portfolio of stocks ... risk or the lowest level of risk for a desired level of return. The formula for CAPM calculates the expected return of an asset ...

To simplify a bit, investors multiply the percentage each asset occupies in a model portfolio by the level of risk or returns it’s expected to deliver. Add up the percentage-adjusted risk levels ...

The frontier consists of portfolios that no other portfolio with the same standard deviation (i.e., amount of risk) can be expected to outperform. Cost basis is the original value of an asset ...