Journal of Islamic Banking and Finance

Islamic Capital Asset Pricing Model (ICAPM)
Rabeea Sadaf, Sumera Andleeb

Abstract
With the increase in trend of moral investment, the conventional finance has observed an over increasing significance of Islamic finance. This change is being observed not only in Asian and Islam dominant countries, but also western corporate world. This paper attempts to empirically evaluate Shari’ah Compliant Asset Pricing Model using data from shari’ah complaint stocks of Karachi- Meezan Index. The results of analysis show that the returns would approximately the same when we use risk free rate (t-bills rate) or inflation rate. However they show a constant trend when evaluated without using risk free rate or inflation rate.

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