Project synopsis

RATIONALE OF THE STUDY:

The Study on capital asset pricing model in equity shares of banking companies will be undertaken with an objective of getting an insight into the concept of investments, market risk, security market line, undervalued overvalued stocks, the risks and the returns. The study aims to determine the market risk involved in the investments and the factors affecting the market risk and to determine required rate of returns. The other objectives of the study are to observe the security market line and the degree of volatility of the Banking industry and undervalued and overvalued stocks.

OBJECTIVES OF THE STUDY: 

  • To observe the risk free rate and evaluate the relationship between risk and return involved in equity share prices of banking industry.
  • To observe the significant risk of shares (market risk or systematic risk).
  • To observe the relationship between security market line and capital market line
  • To develop the inputs required for applying the capital asset pricing model.
  • To produce a benchmark for evaluating various investments and finding out whether the stocks are under or overvalued. 

RESEARCH METHODOLOGY

Method of data collection:

 The Historical data of share prices for the period of one year will be collected from BSE index for the study.

Source of data

Secondary data will be collected from the respective web sites like Bseindia.com, Moneycontrol.com and other financial Journals. 

Period of the study

The study will be done for a period of 30-40 days.

Data analysis tools:

Appropriate data tools like Beta, Mean, Standard deviation will be used.  

LIMITATIONS OF THE STUDY

  • The study will based on the secondary data only.
  • The study will be limited banking stocks only
  • The time for the project is limited to 30-40 days

SCOPE FOR FURTHER RESEARCH:

The study covers the information related to the equities share of banking sector. It also covers the systematic risk and unsystematic risk of banking companies. The study is confined only one Sector i.e., banking industry and the entire study is based upon their Stock prices for a period of last two years. The present study gives an insight into this issue by analyzing the capital asset pricing model Analysis in Equity share prices of the Banking industry.