Abstract
The absolute risk of a security can be bifurcated into systematic and unsystematic risk. The latter is eliminated by more and more diversification. On the other hand, the systematic risk cannot be eliminated and correlated with the market. A stock is efficient if there is no unsystematic risk. Therefore, the only effect security has on the market risk is through its systematic risk; by calculating systematic risk, one cannot conclude whether securities are exactly priced or not. CAPM helps to identify the qualitative assets which are underpriced or over-priced. Thus, selecting the stock is become a challenge to get the expected return by the investor. For facilitating the investor for the selection of right-priced stocks, this research is done with the help of CAPM with respect to NSE NIFTY stocks.
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