The Capital Asset Pricing Model (CAPM) is the most well-known equilibrium model in the capital market. The standard form of CAPM provides a clear description of capital market behaviour if its basic assumptions are respected. There are two main problems. The first one is that some of the basic assumptions are very far from conditions of reality. This is not a problem in itself. The fact that these differences from reality are irrelevant enough, they do not have a material affect on the model’s explanatory power. Secondly, the CAPM describes the conditions of equilibrium about returns on the macro level. It does not describe this equilibrium of micro level with regards to individual investor behaviour. Indeed, most investors and institutions have a risky assets portfolio different from the market portfolio. Therefore, while the model can explain the capital markets behaviour as an entity, it is unable to explain the investors behaviour. In fact, the investor’s portfolio is usually different from the market portfolio. For this reason, different versions from the CAPM standard are developed, by changing the basic assumptions. The aim is to understand and to explain the standard version of the CPM in greater detail, with the investor’s behaviour on the one hand, and the assets price on the other hand. In this context, on the basis of the purpose of this book, the CAPM in its standard version only is considered.