The Relationship Between Risk and Return for Firms Listed at the Nairobi Securities Exchange
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Date
2015-11Author
Giva, Sophie I G
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Risk is the possibility of losing investment. Low risks are associated with low potential
returns while high risks are associated with high potential returns although this
relationship has been empirically contested with few studies being carried out in Kenya
on the same. This study sought to establish the relationship between risk and return for
firms listed in the NSE in Kenya. It targeted to investigate the relationship and how it
affects growth of the market in general. The study was guided by the following
objectives; investigate the relationship between systematic risk and growth of firms listed
in the NSE within the study period. The study used a sample of 14 companies listed at
NSE and analyzed data between 2010 and 2014. This was therefore a census covering all
the data on stock performance in the bourse. The data was subjected to various tools of
analysis to establish any trend that would be used to predict future performance of the
market. The finding showed there is a moderate correlation between risk and the returns
for firms listed in the NSE. The researcher recommends the following: More
consultations between the management and shareholders are required to balance growth
in assets and the expected returns to investors. This is aimed to reduce any conflicts that
might arise and provide an ideal working environment. This leads to enhancing strategic
alliance among owners and management for more market growth. The researcher also
suggests further studies on this relationship by targeting a larger period and by looking at
major political in the country. This could be looked at based on asset growth, market
return and the influence of externalities such as political referendums, elections and even
terror attacks on major investments in the country.
Publisher
University of Nairobi