Assessing and testing the Capital Asset Pricing Model (CAPM): a study involving KSE-Pakistan

1
Muhammad Ibrahim Khan
Muhammad Ibrahim Khan
2
Maria Gul
Maria Gul
3
Noorul Mudassar Khan
Noorul Mudassar Khan
4
Bilal Nawaz
Bilal Nawaz
5
Sanaullah
Sanaullah
1 National Defence University Islamabad

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The current research study tests the CAPM, (Capital Asset Pricing Model) in Pakistan’s stock market, Karachi Stock Exchange KSE. Capital Asset Pricing Model explains the links present between risk and return in efficient markets. Therefore the current study has focused on the calculation of Beta of ten companies registered on KSE, and actual and expected returns have been compared. The data analysis revealed the limited applicability of CAPM to the KSE, 100-index. Further studies may be conducted to check the applicability of the model, by taking a large sample of companies, especially in Pakistani stock exchanges.

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No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

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No ethics committee approval was required for this article type.

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Not applicable for this article.

Muhammad Ibrahim Khan. 1970. \u201cAssessing and testing the Capital Asset Pricing Model (CAPM): a study involving KSE-Pakistan\u201d. Global Journal of Management and Business Research - B: Economic & Commerce GJMBR-B Volume 12 (GJMBR Volume 12 Issue B10): .

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GJMBR Volume 12 Issue B10
Pg. 33- 38
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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The current research study tests the CAPM, (Capital Asset Pricing Model) in Pakistan’s stock market, Karachi Stock Exchange KSE. Capital Asset Pricing Model explains the links present between risk and return in efficient markets. Therefore the current study has focused on the calculation of Beta of ten companies registered on KSE, and actual and expected returns have been compared. The data analysis revealed the limited applicability of CAPM to the KSE, 100-index. Further studies may be conducted to check the applicability of the model, by taking a large sample of companies, especially in Pakistani stock exchanges.

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Assessing and testing the Capital Asset Pricing Model (CAPM): a study involving KSE-Pakistan

Muhammad Ibrahim Khan
Muhammad Ibrahim Khan National Defence University Islamabad
Maria Gul
Maria Gul
Noorul Mudassar Khan
Noorul Mudassar Khan
Bilal Nawaz
Bilal Nawaz
Sanaullah
Sanaullah

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