This study explores the relationship between risk and return; the quantitative analysis has been carried out on all the Pharmaceutical companies listed on KSE. The research has been conducted on the basis of secondary data. The daily data has been used for analysis of last 10 years. Dependent variable is return, independent variables are market volatility which is measured by beta and the other is risk which is measured by Standard deviation. More than one thousand observations have been taken and analyzed. Results show that there is positive relationship between return and market volatility which means when volatility is higher than the return will also be higher. When Market risk premium is positive then company’s stock return will also be positive and when market risk premium is negative then return of company’s stock will also be lower. Results also show that there is positive relationship between risk and excess return
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