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You invest in a portfolio consists of X, Y and Z stocks. The investment value of each stock is presented in Table 1. You also
You invest in a portfolio consists of X, Y and Z stocks. The investment value of each stock is presented in Table 1. You also get information about the return of each stock in 3 (three) possible economic conditions in Table 2. Table 1. Value of each Stock in the Portfolio Portfolio XYZ Investment Value X Y Rp500,000,000 Rp400,000,000 z Rp300,000,000 Table 2. Expected Returns of the Stocks State of the Economy Probability Recession Normal Boom 15% 50% 35% X -15% 10% 20% Stock Y -5% 17% 25% Z -7% 20% 27% Based on the above information, calculate: a. Expected return, variance, and standard deviation for each stock. b. Which stock has the highest total risk? Why? c. Expected return, variance, and standard deviation for the portfolio. d. Give your comments on the quality of the assets in the portfolio
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