This study examines the determinants of stock returns of IT companies based on index model. The study examines the index model using the case analysis of stock returns of three IT Companies-Apple, Google and Microsoft. The analysis was done using the latest five-year monthly data. The study reveals that market index returns is a powerful determinant of stock returns. In terms of sensitivity as measured by beta values, Apple was most sensitive to fluctuations in market returns followed by Google and Microsoft stock returns. The study also examines the predictive ability of current beta using five-year data series of 15 IT companies. The results were statistically insignificant.
Beta, Index Model, Stock returns, IT companies, Apple, Google, Microsoft
Cite this paper
Manuel Fernandez, B. Rajesh Kumar. (2020) Examination of Index Model and Prediction of Beta –A case study examination in IT Sector. International Journal of Economics and Management Systems, 5, 158-161
Copyright © 2020 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0