Case study on stock investment on AMD Inc against the NASDAQ market return and CAPM return model benchmark

Abstract

A case study of AMD's stock performance relative to market indices and the capital asset pricing model (CAPM) was the primary focus of this research. Investors' attention has been drawn by AMD's strong stock performance, which has earned the business recognition as a fast-growing leader in the technology sector. The purpose of this research was to compare and contrast the stock return of AMD (AMD) to that of the market benchmark, which was derived from the performance of the NASDAQ market index, and the expected return of the stock of AMD, using the CAPM estimation model. Based on what was learned in the first place, assumptions were made about AMD stock's performance in relation to the NASQAD market and the expected return from CAPM. The researchers behind the quantitative study recommended a comparative analysis to provide a comparison of the return using the actual investment return for AMD stock against the NASDAQ market index as well as the CAPM computation for the stock. The evidence showed that AMD stock return has a very strong positive association with the NASDAQ market return and CAPM projected return, consistent with the conclusions and findings based on the literature research. AMD's stock return also looks to be above average when compared to the return of the NASDAQ market and the projected return of the capital asset pricing model which suggested that the AMD stock performance had been achieving higher premium return against the market benchmark. The study suggested that the stock of AMD is referred to as a high-risk high-return stock investment.