Sharpe developed a notion of investment risk and reward, a sophisticated reasoning that has become known as the Capital Asset Pricing Model, or CAPM.Sharpe's role in developing the CAPM was recognized by the Nobel Prize committee. Sharpe shared the Nobel Memorial Prize in Economic Sciences that year with Markowitz and Merton Miller.According to CAPM every investment carries two distinct risks, the CAPM explains. One is the risk of being in the market, which Sharpe called systematic risk. This risk, later dubbed "beta," cannot be diversified away. The other—unsystematic risk—is specific to a company's fortunes. Since this uncertainty can be mitigated through appropriate diversification, Sharpe figured that a portfolio's expected return hinges solely on its beta—its relationship to the overall market. The CAPM helps measure portfolio risk and the return an investor can expect for taking that risk. Risk is the key variable. has the CAPM a validity nowadays? Is beta useful? Beta is really focused on whether or not individual stocks have higher expected returns if they have higher betas relative to the market. It would be irresponsible to assume that is not true. That doesn't mean we can confirm the data. We don't see expected returns; we see realized returns. We don't see ex-ante measures of beta; we see realized beta.Real doubt is, does beta correctly expresses correlation of firm returns with market returns and, more precisely, may I select a beta for sectors-ASA, and how distinguish systematic versus unsystematic risk components? Thanks for your answers.