Which model describes the relationship between risk and expected return for individual assets?

The CAPM Model, or Capital Asset Pricing Model, is foundational in finance for determining the relationship between risk and expected return for individual assets. This model posits that the expected return of an asset is proportional to its systematic risk, represented by beta (β). Systematic risk refers to the risk inherent to the entire market or market segment, as opposed to unique risk which can be mitigated through diversification.

In CAPM, the expected return is calculated using the risk-free rate plus a premium based on the asset's beta and the expected market return. The beta coefficient measures how much the asset's return is expected to move in relation to the market and thus provides insight into the risk associated with the asset compared to the overall market.

The other options refer to different concepts. The Ex Ante Pricing Model and Ex Post Pricing Model do not specifically articulate the risk-return relationship in the same structured way as CAPM. The Autocorrelation Model focuses on time series data and the correlation of a variable with itself over time rather than a risk-return framework. Therefore, the CAPM Model stands out as the most relevant choice for understanding the risk-return dynamics of individual assets.