The Capital Asset Pricing Model (CAPM) is reexamined in a broader context called general equilibrium with incomplete markets (GEI). The researchers prove that in GEI, asset prices depend on covariances, not variances, unlike in traditional CAPM. By extending CAPM to include multiple consumption goods, all three key properties of equilibrium are maintained. This means that in this new framework, asset prices are determined by how different assets move together, rather than just their individual risks.