Application of the C.A.P.M. on NYSE & NASDAQ Stocks: Toyota in NYSE
Title: Application of the C.A.P.M. on NYSE & NASDAQ Stocks: Toyota in NYSE
Category: /Social Sciences/Education
Details: Words: 555 | Pages: 2 (approximately 235 words/page)
Application of the C.A.P.M. on NYSE & NASDAQ Stocks: Toyota in NYSE
Category: /Social Sciences/Education
Details: Words: 555 | Pages: 2 (approximately 235 words/page)
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 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%
