# Tag Info

It is a model that allows to price an individual financial asset or portfolio that states the expected financial asset returns $E(R_i)$ is given by:
$E(R_i)$ = $R_f$ + $\beta_i*{(E(R_m)-R_f)}$
• $R_f$ is the risk-free rate of interest such as interest arising from government bonds;
• $(E(R_m)-R_f)$ is the defined as the market premium;
• $\beta_i$ is the sensitivity of the expected excess asset returns to the expected excess market returns, and, it is given by $\beta_i$ = ${COV(R_i;R_m)}\over VAR(R_m)$;