Aisyah, a new investor cannot decide whether to invest in Stock Media Prima or Stock Astro, or in a portfolio which is a combination of both stocks. She has approached RHB securities and the firm has provided her with the following information. Probability (%) Expected return (%) Stock Media Prima Stock Astro 30 13 15 20 14 13 20 15 12 30 16 11 Using these stocks, she has identified two investment portfolio alternatives: Alternatives Portfolio 1 100% Stock Media Prima 2 40% of Media Prima and 60% of Astro
Aisyah, a new investor cannot decide whether to invest in Stock Media Prima or Stock Astro, or in a portfolio which is a combination of both stocks. She has approached RHB securities and the firm has provided her with the following information. Probability (%) Expected return (%) Stock Media Prima Stock Astro 30 13 15 20 14 13 20 15 12 30 16 11 Using these stocks, she has identified two investment portfolio alternatives: Alternatives Portfolio 1 100% Stock Media Prima 2 40% of Media Prima and 60% of Astro
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
c) Calculate the covariance for the above stock.
d) Is the combination of the above stock can be considered as an optimum diversification?
Justify your answer.
![QUESTION 2
Aisyah, a new investor cannot decide whether to invest in Stock Media Prima or Stock Astro,
or in a portfolio which is a combination of both stocks. She has approached RHB securities and
the firm has provided her with the following information.
Probability (%)
Expected return (%)
Stock Media Prima
Stock Astro
30
13
15
20
14
13
20
15
12
30
16
11
Using these stocks, she has identified two investment portfolio alternatives:
Alternatives
Portfolio
1
100% Stock Media Prima
2
40% of Media Prima and 60% of Astro](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8cf5cfbd-4252-455f-87bc-caa6fec640a6%2F9f394d05-1c22-43b4-8f84-3804ff45e7e7%2F6qk4m2f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 2
Aisyah, a new investor cannot decide whether to invest in Stock Media Prima or Stock Astro,
or in a portfolio which is a combination of both stocks. She has approached RHB securities and
the firm has provided her with the following information.
Probability (%)
Expected return (%)
Stock Media Prima
Stock Astro
30
13
15
20
14
13
20
15
12
30
16
11
Using these stocks, she has identified two investment portfolio alternatives:
Alternatives
Portfolio
1
100% Stock Media Prima
2
40% of Media Prima and 60% of Astro
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