Application of the C.A.P.M. on NYSE & NASDAQ Stocks: Toyota in NYSE
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ESSAY DETAILS
Words: 555
Pages: 2
(approximately 235 words/page)
Pages: 2
(approximately 235 words/page)
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Introduction
In order to analyze and apply the C.A.P.M. on the stock of Toyota, one must know what the C.A.P.M. is. This is a formula which is actually an abbreviation of Capital Asset Pricing Model and is used in order to find the appropriate price of an asset. If we analyze the C.A.P.M., we can find the expected return of a stock, such as is demanded …
showed first 75 words of 555 total
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showed first 75 words of 555 total
showed last 75 words of 555 total
…- beta of Toyota is equal to 0, 96 as of 8-1-2006, which means that as the market moves, the stock of Toyota will move. Conclusion After analyzing the factors which put up the equation of the C.A.P.M., the whole equation can be put together, giving us the expected return for Toyota motors in NYSE. E(Ri) = 4.25+(9.44-4.25)*0,96 = 9,2324% = 9,23% So, the expected return for the stock of Toyota motors, as of 6-1-2006 is 9, 23%
…- beta of Toyota is equal to 0, 96 as of 8-1-2006, which means that as the market moves, the stock of Toyota will move. Conclusion After analyzing the factors which put up the equation of the C.A.P.M., the whole equation can be put together, giving us the expected return for Toyota motors in NYSE. E(Ri) = 4.25+(9.44-4.25)*0,96 = 9,2324% = 9,23% So, the expected return for the stock of Toyota motors, as of 6-1-2006 is 9, 23%
