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You are an investor and invest in stock FRIL and NFLL. Stock FRLL didn't pay the dividend while stock NFLL paid dividend frequently. You are
You are an investor and invest in stock FRIL and NFLL. Stock FRLL didn't pay the dividend while stock NFLL paid dividend frequently. You are given price of stock FRLL and NFLL for the last 4 years: Price (in Rp) Year NFLL Stock FRLL Stock NFLL Stock Dividend 2017 1000 1000 2018 1500 1000 100 2019 1200 1000 150 2020 1350 1000 200 a. Calculate arithmetic average return and geometric average return from 2017-2020. b. In 2020, you invest Rp 100 million in stock FRLL and Rp180 million in stock NFLL. You have probabilities for recession 35%, normal 50%, and boom 15%. Under crisis circumstances, you expect the return will be 5% lower than the retum in normal condition, while under boom circumstance the return will be5% higher than return in normal condition. Calculate the expected retum and standard deviation for stock FRLL and NFLL, also find the expected return for the portfolio c. As an investor, which stock do you prefer and why? Explain
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