The capital asset pricing model: applies to portfolios but not too individual securities. rewards investors based on total risk assumed considers the relationship between the fluctuations in a security's returns versus the market's returns assumes the market has a beta of zero and the risk-free rate is positive. assumes the market risk premium is constant over time.

The capital asset pricing model: applies to portfolios but not to individual securities. rewards investors based on total risk assumed. considers the relationship between the fluctuations in a security's returns versus the market's returns. assumes the market has a beta of zero and the risk-free rate is positive. assumes the market risk premium is constant over time.