SERIES 66 CANDIDATES, CAN YOU EXPLAIN THE OBJECTIVE OF CAPITAL ASSET PRICING MODEL (CAPM)?

NASAA publishes a Test Specifications for the Series 66 exam, and Section III (C) (1) (1.1) of these Series 66 Test Specifications includes Capital Asset Pricing Model (CAPM). Therefore, since CAPM is included, candidates for the Series 66 Exam need to know and study CAPM. A good self-test of whether you know what CAPM is about is to write a paragraph and see if you can explain it.

Bob Eder in his Study for the Series 66 Exam discusses CAPM in Chapter 8 on Portfolio Management. Here is a sample of Bob Eder's treatment of CAPM:

"The theory of Capital Asset Pricing Model attempts to establish the likely return of a portfolio, using the portfolio's beta, the expected return of the whole market, and the risk-free return of a T-bill. To arrive at a likely return, the CAPM subtracts the risk-free return, e.g., an average of the return on Treasury bills, say, for the last five years, from the expected return of the whole market. Then CAPM multiplies this net return by the beta of one's portfolio. The result is the expected return of the portfolio."

Here is the link to NASAA's Test Specifications for the Series 66 Exam. 

Study for the Series 66 Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's Series 66 book on Amazon. 

For questions about Bob Eder's Series 66 Manual, Study for the Series 66 Exam, or questions in general about the Series 66 Exam, or about Capital Asset Pricing Model (CAPM), feel free to email Bob Eder at bobeder@bobeder.net.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. 

See Bob Eder's Author Page on Amazon.com.

P.S. Please consider posting a review of Bob Eder's Study for the Series 66 Exam on Amazon and/or Goodreads.