Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Tom has Q and X stocks in his portfolio. Share Q doesn't pay dividends, but Share X does regularly. The following are the stock prices
Tom has Q and X stocks in his portfolio. Share Q doesn't pay dividends, but Share X does regularly. The following are the stock prices of Q and X for the last five years:
Share Dividends for X for 2018-2021 are as follows; 60, 80, 100, and 120 (in $). a. Under normal conditions, calculate the arithmetic average returns for the period 2018 to 2021. (Hint: Rupiah return to Percentage Return) b. In the future, the probability of a recession is 35%, normal is 40%, and boom is 25%. Expected returns in a recession and boom are 4% lower and 4% higher than normal, respectively. Tom in 2021 invests IDR 50 million in Share Q and IDR 70 million in Share X. Calculate the expected return and standard deviation for Shares Q and X as well as the expected return of the portfolio.Stock Price Years (S) 2017 2018 2019 2020 2021 Q 600 730 710 840 940 X 750 750 750 750 750
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