A STUDY ON USE THE CAPITAL ASSET PRICING MODEL TO ASSESS THE PORTFOLIO OF A COMPANY

Portfolio investing, a compelling subject for businesses and individuals, revolves around stocks as a high-return but inherently risky financial instrument. This study delves into the characteristics of stocks, emphasizing the need for investors to comprehend stock dynamics and trading approaches. Amid diverse investment avenues, the pursuit of positive returns is universal, acknowledging the inherent risk in any investment. Notably, equity investments are perceived as riskier than debentures and bonds. Risk is dissected into systematic and unsystematic categories, with the former being uncontrollable and the latter diversifiable. The CAPM functions as a predictive instrument, shedding light on the connection between the risk of an asset and its anticipated return. Utilizing analytical research and secondary data, this study synthesizes information from various sources, offering insights into portfolio management.