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# Derivation of CAPM - rigorous approach

#### Filip Van de Velde

##### New Member
Hi everyone,

Where can I find the derivation of formula (10.4)?

Kind Regards,
Filip

#### David Harper CFA FRM

##### David Harper CFA FRM
Staff member
Subscriber
Hi @Filip Van de Velde Per my morning routine, I want to help but I don't know exactly to which formula you refer? We (BT) do not have the GARP readings, actually, we have the source texts that constitute the GARP anthology and I think maybe the numbering is different. When you write 10.4 and cite CAPM, I immediately assume Bodie Chapter 10 where 10.4 is: R(p) = α(P) + β(P)*R(M). Is this the formula to which you refer? The P1.T1. assigned R8 (Elton, Gruber, Brown and Goetzmann, Modern Portfolio Theory and Investment Analysis, 9th Edition) is actually a comprehensive theoretical introduction to CAPM (the entire book I mean), although not "casual reading." Let me know? Thanks!

#### Filip Van de Velde

##### New Member
Hi David,

Here is the formula: