If investors are guided only by risk and return, and if they all have the same estimates of assets' expected returns, risks, and mutual correlations, 26 then, Sharpe's analysis showed, the prices of assets had to adjust such that in equilibrium there was a straight-line relationship between the expected return on an asset and its beta, the extent of its sensitivity to the return on an optimal portfolio. This result was at the core of what was soon to become known as the Capital Asset Pricing Model (CAPM .

Donald MacKenzie, An Engine, Not a Camera, loc. 240