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Paper Title
Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market
Authors
Muzafar Ahmad Shah , Prof. Khursheed Ahmad Butt
Keywords
Indian stock exchange, Beta anomaly, portfolios, residual risk.
Abstract
The aim of this study is to determine whether the capital asset pricing model exists in the Indian stock market. Using the integrated concepts of Black Janson and Scholes and Fama and Macbeth technique on portfolios rather than individual stocks. We have taken the sample of 150 midcap stocks from 2021 to 2023 (36 months). The study provides empirical evidence that there is a risk anomaly in the Indian equities market while the capital asset pricing model's assertion that risk and return are directly correlated. The study findings also demonstrate the non-linearity between portfolio betas and returns which goes against the CAPM theory. This study also explores whether the CAPM fully accounts for stock variance to test the effectiveness of unsystematic risk and our findings suggest that the residual risk is insignificant, which is according to the Capital Asset Pricing Model.
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IJRTI — journal style
"Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market", IJRTI - International Journal for Research Trends and Innovation (www.ijrti.org), ISSN:2456-3315, Vol.10, Issue 8, page no.a610-a621, August-2025, Available :https://ijrti.org/papers/IJRTI2508075.pdf
APA — 7th edition
Shah, M. A., & Butt, K. A. (2025). Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market. International Journal for Research Trends and Innovation, 10(8), a610-a621. https://ijrti.org/viewpaperforall.php?paper=IJRTI2508075
MLA — 9th edition
Shah, Muzafar Ahmad, and Khursheed Ahmad Butt. "Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market." International Journal for Research Trends and Innovation, vol. 10, no. 8, 2025, pp. a610-a621, https://ijrti.org/viewpaperforall.php?paper=IJRTI2508075.
Chicago — 17th, bibliography
Shah, Muzafar Ahmad, and Khursheed Ahmad Butt. "Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market." International Journal for Research Trends and Innovation 10, no. 8 (2025): a610-a621. https://ijrti.org/viewpaperforall.php?paper=IJRTI2508075.
Harvard — author–date
Shah, M.A. and Butt, K.A. (2025) 'Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market', International Journal for Research Trends and Innovation, 10(8), pp. a610-a621. Available at: https://ijrti.org/viewpaperforall.php?paper=IJRTI2508075
IEEE — numbered reference
M. A. Shah and K. A. Butt, "Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market," IJRTI, vol. 10, no. 8, pp. a610-a621, Aug. 2025.
Vancouver — biomedical
Shah MA, Butt KA. Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market. IJRTI. 2025 Aug;10(8):a610-a621.
AMA — 11th edition
Shah MA, Butt KA. Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market. IJRTI. 2025;10(8):a610-a621. Accessed at https://ijrti.org/viewpaperforall.php?paper=IJRTI2508075
BibTeX — Zotero, Mendeley, LaTeX
@article{IJRTI2508075,
author = {Muzafar Ahmad Shah and Khursheed Ahmad Butt},
title = {Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market},
journal = {International Journal for Research Trends and Innovation},
volume = {10},
number = {8},
pages = {a610-a621},
year = {2025},
month = {August},
issn = {2456-3315},
url = {https://ijrti.org/viewpaperforall.php?paper=IJRTI2508075}
}
RIS — EndNote, RefWorks
TY - JOUR
AU - Shah, Muzafar Ahmad
AU - Butt, Khursheed Ahmad
TI - Does CAPM Explains the Relationship Between Risk and Return in the Indian Stock Market
T2 - International Journal for Research Trends and Innovation
JA - IJRTI
VL - 10
IS - 8
PY - 2025
SN - 2456-3315
UR - https://ijrti.org/viewpaperforall.php?paper=IJRTI2508075
SP - a610-a621
ER -
Issue
Volume 10 Issue 8,
August-2025
Pages : a610-a621
Other Publication Details
Paper Reg. ID
IJRTI_205741
Published Paper ID
IJRTI2508075
Downloads
205,630
Research Area
Commerce
Country
kulgam, jammu and kashmir, India
Published
August 2025
Published Paper PDF
https://ijrti.org/papers/IJRTI2508075.pdf
Published Paper URL
https://ijrti.org/viewpaperforall.php?paper=IJRTI2508075
About Publisher
International Journal for Research Trends and Innovation
Published by IJRTI (JW Publication)
2456-3315
ISSN
10.57
Impact Factor
2016
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Declarations
Funding
No external funding was received for this study.
Conflict of Interest
The authors declare that they have no conflict of interest.
Acknowledgements
The authors would like to thank the reviewers and the editorial board of International Journal for Research Trends and Innovation for their careful reading and constructive comments, and all colleagues who supported the preparation of this manuscript.
