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Test of CAPM model in S&P 500 index for tech and food industry
Mälardalen University, School of Business, Society and Engineering.
Mälardalen University, School of Business, Society and Engineering.
2024 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

This study explores the Capital Asset Pricing Model (CAPM) to understand the relationship between expected returns and investment risk. By focusing on two distinct industries—food and technology—we aim to analyze and compare the risk and return characteristics of stocks from these sectors over a ten-year period (2007-2017), including the impact of the 2007-2010 financial crisis. Utilizing CAPM, we investigate how beta values differ between these industries, indicating their respective risk profiles. Our findings suggest that technology stocks exhibit higher betas and returns, consistent with their higher risk, while food industry stocks show lower betas, indicating stability but lower returns. This study contributes to investment strategy discussions by highlighting the trade-offs between risk and return in different industry sectors and underscores the significance of the financial crisis on stock performance.

Place, publisher, year, edition, pages
2024. , p. 28
National Category
Economics
Identifiers
URN: urn:nbn:se:mdh:diva-67545OAI: oai:DiVA.org:mdh-67545DiVA, id: diva2:1870937
Subject / course
Economics
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Examiners
Available from: 2024-06-20 Created: 2024-06-15 Last updated: 2024-06-20Bibliographically approved

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