 you see the practical part of that. और जो मैंने सोग वैसे पता दिया है के बहुत कंपनी जिस को इसके लिए use करनी है even investors के लावा कंपनी के CFOs कोत भी समाल का रहे होतने इसको to see what's happening, how they are performing in their area. CAPEM formula is used to calculating the expected returns of an asset. में नहार जिस्ट वही है के हमें expected return निकालने है so CAPEM की भी utility उसी में आती है it is based on the idea of systematic risk के हमें वो रिस जो मारकेट का है उसके रिसक के बेस्पे what return we are going to get that investor need to be compensated because ये दिवर्सिफाए नहीं हो सकता नहीं नहीं अगर दिवर्सिफाएबल है so we have to see इसके हमें हमें क्या रिटान में रहा है a risk premium is the rate of return greater than the risk pre-rate कि मार अर्फ से उपर जो आपको रिटान माकेट देती है that is the risk premium when investing investor desire a higher risk premium when taking more risk investment logical शी बात है के हम अगर राद रिसक ले रहे है then we should get a risk premium more than premium should increase cap-m formula and calculation very important maybe you have seen it somewhere take it as an opportunity to learn it, revive it because that is very important expected return is risk free rate then we have बीटा times the expected returns of market minus the Rf so expected return, risk free rate अब भीटा जो सेंस्टिवीटी को गेज का रहे है and risk premium से इसको मुल्टिप्लाइ करते है so we get that our investment of this portfolio should be expected return let's calculate expected return using cap-m suppose that falling information about stock is known हमें येटा अवेलिबल है ये नुयाग श्टोक शेंच पे लिस्टेड है बाएसान की भी कर सकते हैं but we give you international examples so that your horizon and learning curve is more wider बाट हम लोकल की भी बात साथ साथ ते रहे हैं this case में येटा येटा ये नुयाग श्टोक शेंच पे लिस्टेड है येटा ये मरे पास अवेलिबल है और आई. let's break down the answer using the formula in article expected return येटा बाट हैं नुयाग देखसे नागे थे हैं how it will come out? we plug in the formulas in the formula we have just learnt 2.5s risk free we have started took our beta multiply by risk premium in this case येटा येटा आप को रिस्टेड है many times we will not give you risk premium we will give you the market return for example he says market return is 10 so you can get it yourself minus rf 7.5 here he gave the premium so make sure you look at the terms carefully specially when you come to the exam if you take the premium of 7.5 then the answer may be if mcq has a question then the wrong one will also be there you will say that my answer was right then why did i miss so you have to see given data in which form and rm has been given or risk premium has been calculated so make sure you carefully see and use the right data so it has been drive that is 11.9% is return based on the expected return using capem to build a portfolio supposed to help investor manage their risk the risk they want to take accordingly the application will help out so if you use capem to perfectly optimize a portfolio return to risk it will exist on a curve called efficient frontier as shown in the following graph now we will see it graphically capem through its reflection so capital market line you drew which we saw in cml when we will see it from calculation point of view so this is one the ideal portfolio you can see here one that is drive giving us the highest level of return given the expected risk we are going to take so we can see it from formula graphically from table we can extract and draw so the graph show how the greater expected return require greater expected risk normal trend our graph for different lines we are familiar with it but we as a normal procedure we have to tell what is x axis reflecting what is y axis so logic is higher the risk higher the return modern portfolio suggest that starting with risk free rate the expected return of portfolio increase as the risk so as they increase the risk level so expected return fill you capem you can calculate thank you