Literature describes that there is strong relation betweenrisk and return, and they have great impact on stockreturn, some times this impact is positive and some timesit is negative. This study investigates how risk affectsthe stock prices and its relationship with the stockreturns. This study also evaluates how volatility affectsthe stock returns.
Scope and Limitation
The study is comprises upon the Karachi stock exchange(KSE) no other stock exchange is included in this study.The scope of this study is limited to last five yearsmonthly stock prices of fifteen companies those haveatleast 1 percent of market capitalization and also theyhave regular 60 months trading. This study covers theeffect of risk on the stock prices and also relationship ofrisk and return between these stocks. This study will beapplicable and helpful for other researches related to thistopic.