CAPM Expected Return
Capital Asset Pricing Model (CAPM) was introduced by Jack Treynor, William Sharpe, and John Litner independently building on work done by Harry Markowtiz's efficiency frontier theories.
The CAPM is a measure of the relationship between risk and expected return of a security. The idea is that an investor should be compensated by the amount of risk they take on, in addition to the expected market return.
Formula
CAPM Expected Return = risk free rate + [5 year security beta * (annualized 5 year average return of benchmark - risk free rate)]
Risk Free Rate = 5 year average of the 1 Month Treasury Rate