The "Capital Asset Pricing Model" measures the risk premium for a capital investment by comparing the expected return on that investment with the:

A) average return on other investments of similar risk.
B) average return on the past several years' investments made by the firm.
C) expected return on the entire stock market.
D) expected return on the government bond market.
E) expected return on the corporate bond market.

Capital Asset Pricing Model

A theoretical framework used to determine the expected return on an investment by accounting for its inherent risk, usually represented as the risk-free rate plus the risk premium.

Risk Premium

Maximum amount of money that a risk-averse individual will pay to avoid taking a risk.

Expected Return

The predicted average of possible returns for an investment, accounting for the probability of each outcome and its associated return.