pected return on risky assets. The foundation for modern portfolio theory, on which the CAPM is based, was however laid down a few years earlier by Harry Markowitz in 1952 (Markowitz 1952). Mathematically the CAPM is expressed as: E(R)- Rf + fli[E(R„,)- RI] (1) 11 EFTA00617320 Where E(R,) is the expected