Evaluating the capital asset pricing model methodology in Uzbekistan companies

Abstract

This article evaluates the applicability of the Capital Asset Pricing Model (CAPM) in the context of Uzbekistan's
evolving financial market. While CAPM serves as a foundational framework for linking risk and expected return in financial
theory, its underlying assumptions often diverge significantly from the realities of emerging economies. This study
examines the theoretical underpinnings of CAPM, reviews academic criticisms, and analyzes the specific challenges
posed by Uzbekistan's unique market characteristics, including its ongoing reforms, market structure, and data availability.
A conceptual framework for empirical analysis is presented, outlining expected findings based on existing literature on
emerging markets, given the current limitations in accessible granular data. The analysis concludes that the direct,
unadjusted application of CAPM in Uzbekistan is likely to yield unreliable results due to systematic violations of its core
assumptions and difficulties in parameter estimation. The article suggests that while CAPM provides a useful theoretical
lens, practical application necessitates substantial adjustments or the consideration of alternative, multi-factor models.
Furthermore, it highlights key areas for future research and policy recommendations aimed at fostering a more mature,
transparent, and efficient capital market in Uzbekistan