Comparative Assessment of the Analytical Risk-Averse Premium Model and Its Risk and Returns: Critical Analysis of Capital Asset Pricing Model (CAMP)

Journal for Studies in Management and Planning, Vol. 1, No. 2, March 2015

12 Pages Posted: 7 May 2015

See all articles by Hussain Shah

Hussain Shah

Comsats University Islamabad

Abbas Jaffar

Donghua University

Muhammad Anwer

Huazhong University of Science & Techlonogy

Najabat Ali

JIANGSU UNIVERSITY

Date Written: November 6, 2014

Abstract

This research study attempts to explain the risk and returns of Capital asset pricing model in stocks and investments scenario. In this present study, the model (CAPM) is validated both theoretically and empirically subsequently. Capital asset pricing model is one of the tools for investors to take a decision regarding their investments in various situations by offering risk adjusted returns. This paper creates a concrete underlying building blocks for an investor keeping in view the Modern Portfolio Theory and also the risk and return considerations. Beta is used to prioritize the understanding of different available funds in the market, fund strategies and also to identify instruments for the investors to diversify portfolios of investments. Finally readers would get the idea of how much exactly the investor would get return in order to put his investment in a riskier asset management company instead of a sovereign entity i.e. bank. This paper provides a general investment opportunities for investors not only in order to quantify the risk but also explaining the best risk adjusted returns into estimates of equities expected return.

Suggested Citation

Shah, Hussain and Jaffar, Abbas and Anwer, Muhammad and Ali, Najabat, Comparative Assessment of the Analytical Risk-Averse Premium Model and Its Risk and Returns: Critical Analysis of Capital Asset Pricing Model (CAMP) (November 6, 2014). Journal for Studies in Management and Planning, Vol. 1, No. 2, March 2015, Available at SSRN: https://ssrn.com/abstract=2603006

Hussain Shah

Comsats University Islamabad ( email )

Park Road
Chak Shahzad
Islamabad, North-West Frontier Province 44000
Pakistan

Abbas Jaffar

Donghua University ( email )

Shanghai 200051
China

Muhammad Anwer

Huazhong University of Science & Techlonogy ( email )

No.1037 Luoyu Road, Wuhan, P.B.430074, P.R. CHINA
HUST
Wuhan, Hubie 0086
China
13125138875 (Phone)

HOME PAGE: http://ssrn.com/author=2391580

Najabat Ali (Contact Author)

JIANGSU UNIVERSITY ( email )

Jiangsu University
Zhenjiang, CA
China
212013 (Fax)

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