NOTE

X = 6

Y = 8

You invest your money on a portfolio ABC that consists of stock A, stock B, and stock C. Each value of your investment given on Table 2. You have information that the return of each stock under three circumstances is given in Table 1. Table 1. Return of Each Stocks in Certain Economics Conditions Probability Stock A B Recession 15% -1X% -5% -7% Normal 50% 10% 34% 20% Boom 35% 20% 1X% 17% Table 2. Allocation of Each Stocks in a Portfolio ABC Portfolio ABC A B Investment (rupiah) Rp500,000,000 Rp400,000,000*(1+X%) Rp300,000,000*(1-Y%) Based on information above, calculate: a. Expected return, variance, and standard deviation for each stock. b. Which stocks that have a higher risk? Why? c. Expected return, variance, and standard deviation for portfolio ABC