The CAPM helps investors measure investment risk and expected return to appropriately value the asset. In particular, investors must be compensated for the time value of money and risk. The risk-free rate, typically a Treasure Bond or stock index, represents the time value of money for investing money in any investment. Simply put, a stock's average return should be linearly related to its Beta coefficients. This shows that riskier investments earn a premium over the benchmark rate. Following a risk-return framework, the expected return, in a CAPM model, will be higher when the investor bets higher