The CAP method, also known as the Capital Asset Pricing Model, is a financial tool used to determine the expected return on an investment based on its level of risk. This method takes into account the risk-free rate of return, the market risk premium, and the beta coefficient of the investment to calculate the appropriate rate of return. It is commonly used by investors and financial analysts to evaluate the potential profitability of an investment and make informed decisions. The CAP method is a valuable tool in portfolio management and helps individuals and businesses make strategic investment choices.