Tests of The FAMA French Model in Indian Stock Market
This paper has considered a sample of 30 stocks which are listed in Bombay Stock Exchange (BSE) SENSEX Index. The SandP BSE SENSEX (SandP Bombay Stock Exchange Sensitive Index), also-called the BSE 30 , is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on BSE Ltd. Daily data allow us to more authentic data to measure stock’s performance over shorter time horizons. In this paper an attempt has been made to test validity FAMA French inIndian stock market to check how far the forecasting of expected return will match the actual return. This paper concludes that though FAMAFrench model is an extension of CAPM and can be used for forecasting of expected return but there is significant difference between the expected return as per FAMA French Model and actual return.