calculate_capm_cost_of_equity

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

No annotations are provided, so the description bears the full burden. It discloses only that the result is a decimal rate, but omits input unit requirements (e.g., decimal vs percentage), the specific CAPM formula, and any error handling or edge cases. This is insufficient for a tool with no structured annotations.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is a single sentence of 9 words, front-loading the key verb and resource. No extraneous information is present.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

This is a simple calculation tool with an output schema, so the description doesn't need to explain return values. However, the lack of parameter semantics and usage guidance leaves the description minimally viable but incomplete for an agent operating among similar financial tools.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

The schema provides only parameter names without descriptions, and the description adds no parameter-level details. With 0% schema description coverage, the description was expected to compensate but does not; 'beta' and 'expected_market_return' remain ambiguous in terms of units and expected format.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Does the description clearly state what the tool does and how it differs from similar tools?

The description uses a specific verb 'Calculate' and clearly identifies the resource as 'CAPM cost of equity', with the additional clarification 'as a decimal rate' that distinguishes it from other valuation metrics like WACC. This provides a clear, unambiguous purpose.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description implies usage (when CAPM cost of equity is needed) but provides no explicit guidance on when not to use this tool or which alternative to choose. Given the sibling tool calculate_wacc_rate, the lack of differentiation is a gap.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.