Question
Six months ago, Amirul Ariffin and his wife moved into a house located in Putrajaya. His next door neighbour is a beautiful young lady by
Six months ago, Amirul Ariffin and his wife moved into a house located in Putrajaya. His next door neighbour is a beautiful young lady by the name of Adriana Ibrahim. Over the past two months, Amirul got to know that she had just purchased the house that she is currently staying for RM1 million. She also drives a Porsche and works as an investment analyst in an established HSBC in Kuala Lumpur. Amirul was perplexed as to how Adriana could afford to own a bungalow and Porsche of that worth. He asked his wife, Zahidah to do the enquiry. One day, after returning from work, Zahidah told Amirul that she managed to obtain some information about Adriana from Adriana herself. Adriana told her that she purchased all her assets using a loan from the Standard Chartered bank. In order to sustain the loan repayment, she has made a few investments. To start with, she borrowed her parents money of RM80,000 at zero interest to invest in 800 shares of IMAB Bhd at the beginning of 2016. During the year, IMAB Bhd paid a dividend of RM5 per share. At the end of the year 2017, she sold the 800 shares for RM118 a share. Adriana also told Zahidah that she graduated from Universiti Utara Malaysia three years ago and immediately, secured a job as the investment analyst. After receiving her first salary, she took up a personal loan in order to invest in Amanah Saham Jaya so that she would have enough money to pay for the 5% downpayment of the bungalow in Putrajaya. Zahidah then told Amirul that Adriana had proposed several potential investments that Zahidah and Amirul could take up as investment. One of the investments was to invest in FEDA Bhd, an agriculture company. Adriana gave Zahidah the brochure of which Zahidah showed to Amirul. Amirul observed that the distribution of expected of returns was quite lucrative as follows: BWFN5013 INVESTMENT 3 Matric No: _________________ FEDA Bhd Possible Rate of Return Probability -0.10 0.30 0.00 0.10 0.10 0.30 0.25 0.30 Adriana also suggested to Zahidah to invest in 2000 shares of Sukun Bhd that cost RM50 per share. The shares are now selling for RM90 per share. She suggested that Zahidah can either opt to put a stop loss order at RM80. Alternatively, if the shares eventually decline in price to RM60 per share, Zahidah can decide whether to have the return with or without the stop loss order. Amirul eventually asked Zahidah to invite Adriana for tea to discuss further. Apart from wanting to seek more information on Adrianas proposal, he would also like to seek Adrianas advice on an investment that he has made worth RM100,000 in shares selling for RM80 per share with an initial margin requirement of 60 percent. You are required to determine: a. Determine for the 800 shares: i. The total Holding Period Yield (HPY). (7 marks) ii. The amount due to the price change. (5 marks) iii. The amount due to the dividend income.
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