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Risk and investment decisions in stock markets: evidence from four Asian countries

Author

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  • Syed Ali Raza
  • Syed Tehseen Jawaid
  • Adeel Hussain

Abstract

This study investigates the validity and acceptability of capital asset pricing model (CAPM) in four different stock exchanges of Asian countries. The paired sample t-test is applied to find the difference between actual and expected returns. Results confirm that CAPM accurately predict the expected returns of both short and long-term investments in Asian markets. It is recommended that those investors, who are risk taker and wish to invest on long-term basis, must consider securities listed in JKT 30, SSE 50 and HSE 35 indices. Short-term risk taker investor must consider securities listed in SSE 50 and JKT 30 indices. Those investors who are risk neutral and wish to invest on long-term basis must consider securities listed in KLSE 30 index. Short-term risk neutral investors must consider securities listed in KLSE 30 and HSE 35.

Suggested Citation

  • Syed Ali Raza & Syed Tehseen Jawaid & Adeel Hussain, 2014. "Risk and investment decisions in stock markets: evidence from four Asian countries," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 6(3), pages 227-250.
    • Handle: RePEc:ids:injmfa:v:6:y:2014:i:3:p:227-250
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    Cited by:

    1. Biswajit Prasad Chhatoi & Munmun Mohanty, 2023. "Discriminants of risk tolerance among Indian investors: a dichotomous discriminant approach," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 15(1), pages 112-134.

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