The Empirical Study of CAPM on Amazon, Facebook, Apple, Netflix, and Adobe

Abstract

Capital Asset Pricing Model (CAPM) is one of the most popular models for the estimation of the expected return of an asset. CAPM is widely used throughout the financial field for the purpose of pricing and expected returns for resources provided the risk of these resources and price of capital. This paper will be using knowledge gathered from Yahoo Finance and extra options to analyze the expected get back of every of assets. This data will be used to calculate CAPM in order to predict the expected returns of Amazon, Facebook, Apple, Netflix, and Adobe. The historical pricing of the asset, market index, and the 1-year treasury constant maturity rate are using in regular basis for the range of 10 years (French, 2016).

Keywords: Beta, CAPM, Consumption Beta, Empirical, Expected Return