The Importance of Investment Decisions Using the Capital Asset Pricing Model (Capm) In Hospital Stock

Abstract

Background:This research tests the Capital Asset Pricing Model (CAPM) in determining the required rates of return on Indonesian healthcare sectors stocks with the actual rates of return.

Objectives: To find out the required speed of the Indonesia healthcare reported sector, especially hospital stocks, from April 1, ^st 2021, to March 31, 2022, and compare them with the actual rates of return in the corresponding periods to identify the valuation status of the stocks.

Methods:To be an empirical study, we adopted analytical research. The collecting data is from www.yahoo.finance.com and doing analytical research with CAPM

Results:The findings show that the Capital Asset Pricing Model (CAPM) did not give any appropriate forecast of the return from healthcare sectors stocks thought the one-year period of study because the result was different from the annual report from this group of hospital companies.

ConclusionsThe Capital Asset Pricing Model (CAPM) is not a good predictor of stock return in the Indonesian Stock Exchange healthcare sector.