Abstract
In the modern financial world, when investors make capital market investments, they are often confused about what kind of portfolio can bring the maximum benefit return with the minimum risk. This paper mainly studies the theoretical basis of CAPM and the application field of the model. In order to clearly summarize the CAPM model, this paper evaluates and summarizes the relevant research results of CAPM in stock investment and structure optimization in different literatures through the method of literature review. Finally, this paper finds that CAPM, as a single factor model, is convenient for users to calculate data, but in the actual use of the market, it is not suitable for investors to rely on because of too idealized assumptions and the risk coefficient.
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