what is the international capital asset pricing model icapm 
the international capital asset pricing model icapm is a financial model that applies the traditional capm principle to international investments it extends capm by considering the direct and indirect exposure to foreign currency in addition to time value and market risk included in the capm the bottom linethe capm uses the principles of modern portfolio theory to determine if a security is fairly valued it relies on assumptions about investor behaviors risk and return distributions and market fundamentals that don t match reality however the underlying concepts of capm and the associated efficient frontier can help investors understand the relationship between expected risk and reward as they strive to make better decisions about adding securities to a portfolio 