TY  - JOUR
T1  - Actual and Required Return on Stocks Evidence from Jordan
AU - A. Al Kilani, Qais 
JO  - International Business Management
VL  - 11
IS  - 11
SP  - 1867
EP  - 1870
PY  - 2017
DA  - 2001/08/19
SN  - 1993-5250
DO  - ibm.2017.1867.1870
UR  - https://makhillpublications.co/view-article.php?doi=ibm.2017.1867.1870
KW  - Actual return
KW  -required return
KW  -systematic risk
KW  -CAPM
KW  -affected
KW  -emerging
KW  -market
AB  - The purpose of this study is to determine whether the actual returns on stocks are deferent from or
close to the required returns relative to the level of risk calculated by the CAPM so that, the investors could
actively manage their portfolios and hence, identify the overpriced or underpriced stocks or to assist in
predicting market trends. To analyze this relationship, actual and required returns of a sample of 40 stocks from
among 220 stocks listed is Amman Stock Exchange-ASE (first and second markets) were selected and analyzed,
this sample represents all ASE market sectors for the period (2000-2016). Results showed that required returns
of stocks are positively correlated to the systematic risk expressed by beta coefficients before and after
2008 the beginning of world financial crisis (to avoid the adverse effect of financial crisis on returns), negative
co-relation of actual returns of stocks with beta coefficients and negative correlation of actual returns with
required returns. So, relying on CAPM, the investors could not get benefit from this variation in returns and
could not predict the mispriced stocks and then no capital gain will be obtained on this basis. This conclusion
due to the fact that the stock market in Jordan is emerging market and is highly affected by rumors.
ER  -