The Gap between the Returns that Calculated by Capital Asset Pricing Model and the Actual Returns in Abu Dhabi Securities Exchange (ADX): Evidence from the United Arab Emirates


  •  Anas Ali Al-Qudah    

Abstract

This study aimed to compare the Historical Returns (Rit) in companies listed in Abu Dhabi Securities Exchange (ADX) with the return which calculated by Capital Asset Pricing Model (E(Rit)) for the same companies and periods, and trying to figure out the level of dispersion, distortions and differences between them, and trying to figure out the strengths and weaknesses for the CAPM to explain the variances which happened in the Annual Return.

The researcher used the time series analysis to achieve the target of this study, using Microsoft Office Excel software to introduce some figure and graphs which considered as output from Scatter charts, which are often used to find out if there's a relationship between variable X and Y to make judgment on the gap between the variables mentioned before.

The researcher found that in the most of the study sample firms the capital asset pricing model could not to predict the returns were generated by companies in Abu Dhabi Securities Exchange (ADX), except in the banking sector, the result was amazing because the graphs which output from the time series analysis show the ability of CAPM to predict the Historical Returns, they were very closed and they Walking in the same direction without volatility.

After the results appear in the time-series analysis researcher can says that there are weaknesses in the ability of CAPM to predict the returns in the financial markets which consistent with the (Fama & French, 1992) and with most studies conducted in this regard, but the model shows high ability to predict the returns in the banking sector. Therefore, the researchers can generalization this result on the financial markets in the United Arab Emirates. uage:EN-US;mso-fareast-language:ZH-CN;mso-bidi-language:AR-SA'>A critical demand for more nurses 30%-40% in certain units due to high work load. Most of the nurses were not satisfied about monitory compensation, participation in decision making and inadequate supplies.


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