Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hairul is considering to buy the ordinary shares of One Berhad and Two Berhad. The possible returns for the companies shares next year are as
- Hairul is considering to buy the ordinary shares of One Berhad and Two Berhad. The possible returns for the companies shares next year are as follows:
| State of economy | Probability | Rate of return (r) | |
|
|
| One Berhad % | Two Berhad % |
| Normal | 0.4 | 20 | 19 |
| Growth | 0.6 | 25 | 28 |
- Calculate the expected return of the shares.
(2 marks)
- Calculate the variance for each share
(4 marks)
- Calculate the standard deviation of each share.
(4 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Investment Risk Management
Authors: Yen Yee Chong
1st Edition
0470849517, 9780470849514
