Tutorial Risk & Return
Investment in Share Market • Nota & Jawapan Lengkap
Seri Suria Corporation Berhad
Below are the financial data for Seri Suria Corporation Berhad.
| Year | Beginning market price (RM) | Closing market price (RM) | Annual dividend (RM) |
|---|---|---|---|
| 2007 | 2.20 | 2.50 | 0.10 |
| 2008 | 2.50 | 3.00 | 0.25 |
| 2009 | 3.00 | 2.80 | 0.30 |
| 2010 | 2.80 | 2.60 | 0.20 |
| 2011 | 2.60 | 3.20 | 0.15 |
If Johana had bought shares of this company at the beginning of year 2007 and sold them at the end of 2011.
Calculate:
- i. The Holding Period Return (HPR) from her investment
- ii. The Holding Period Yield (HPY) from her investment
- iii. The Annualized Holding Period Yield from this investment
📘 Konsep Penting
- HPR (Holding Period Return): Mengukur berapa kali ganda wang anda berkembang (indeks kekayaan). Formula: 1 + HPY.
- HPY (Holding Period Yield): Peratus keuntungan bersih sebenar.
- Annualized HPY: Purata pulangan tahunan (Compounded annual growth rate).
Harga Beli (P₀): RM2.20 (Awal 2007)
Harga Jual (Pₙ): RM3.20 (Akhir 2011)
Tempoh (n): 5 tahun
Jumlah Dividen: 0.10 + 0.25 + 0.30 + 0.20 + 0.15 = RM1.00
1. Holding Period Yield (HPY)
Formula: [(Pn - P0) + Dividen] / P0 HPY = [(3.20 - 2.20) + 1.00] / 2.20 HPY = [1.00 + 1.00] / 2.20 HPY = 2.00 / 2.20 HPY = 0.9091
Jawapan HPY: 90.91% ✨
2. Holding Period Return (HPR)
Formula: 1 + HPY HPR = 1 + 0.9091 HPR = 1.9091
Jawapan HPR: 1.9091 kali ganda ✨
3. Annualized Holding Period Yield
Formula: (HPR)^(1/n) - 1 Annualized = (1.9091)^(1/5) - 1 Annualized = 1.1381 - 1 Annualized = 0.1381
Jawapan Annualized: 13.81% ✨
Success Corporation
Below is the financial data for Success Corporation.
Soalan meminta pengiraan untuk "Year 2 until Year 5".
| Year | Ending market price (RM) | Cumulative dividend |
|---|---|---|
| 1 | 4.75 | 1.00 |
| 2 | 6.20 | 1.25 |
| 3 | 6.80 | 1.60 |
| 4 | 6.00 | 1.60 |
| 5 | 6.10 | 2.00 |
You are required to calculate:
- a) The holding period return (HPR) for year 2 until year 5
- b) The holding period yield (HPY) for year 2 until year 5
- c) The Annualized Holding Period Yield
Harga Beli (P₀): RM4.75 (Akhir Tahun 1 / Awal Tahun 2)
Harga Jual (Pₙ): RM6.10 (Akhir Tahun 5)
Tempoh (n): 4 tahun (Tahun 2, 3, 4, 5)
Dividen (Tahun 2-5): (Cumul. Thn 5) - (Cumul. Thn 1) = 2.00 - 1.00 = RM1.00
1. Holding Period Yield (HPY)
HPY = [(6.10 - 4.75) + 1.00] / 4.75 HPY = [1.35 + 1.00] / 4.75 HPY = 2.35 / 4.75 HPY = 0.4947
Jawapan HPY: 49.47% ✨
2. Holding Period Return (HPR)
HPR = 1 + HPY HPR = 1 + 0.4947
Jawapan HPR: 1.4947 ✨
3. Annualized Holding Period Yield
Annualized = (1.4947)^(1/4) - 1 Annualized = 1.1057 - 1 Annualized = 0.1057
Jawapan Annualized: 10.57% ✨
Token Corporation (Project A & B)
Token Corporation is considering two mutually exclusive projects. The initial outlay for each of the project is RM95,000. Their annual net cash flow (NCF) over the expected life of 5 years under the following economic conditions are:
| Conditions | Probability | NCF A (RM) | NCF B (RM) |
|---|---|---|---|
| Downturn | 0.20 | 35,000 | 18,000 |
| Normal | 0.65 | 45,000 | 41,000 |
| Upturn | 0.15 | 55,000 | 65,000 |
Calculate the expected value, variance, standard deviation and coefficient of variance for both projects.
🎀 Project A Calculations
1. Expected Value (Mean)
E(R_A) = (0.20 × 35,000) + (0.65 × 45,000) + (0.15 × 55,000) E(R_A) = 7,000 + 29,250 + 8,250 E(R_A) = RM44,500
2. Variance & Standard Deviation (σ)
Downturn: 0.20 × (35,000 - 44,500)² = 18,050,000 Normal: 0.65 × (45,000 - 44,500)² = 162,500 Upturn: 0.15 × (55,000 - 44,500)² = 16,537,500 Var_A = 34,750,000 σ_A = √34,750,000 = RM5,894.91
3. Coefficient of Variation (CV)
CV_A = 5,894.91 / 44,500 = 0.1325
🎀 Project B Calculations
1. Expected Value (Mean)
E(R_B) = (0.20 × 18,000) + (0.65 × 41,000) + (0.15 × 65,000) E(R_B) = 3,600 + 26,650 + 9,750 E(R_B) = RM40,000
2. Variance & Standard Deviation (σ)
Downturn: 0.20 × (18,000 - 40,000)² = 96,800,000 Normal: 0.65 × (41,000 - 40,000)² = 650,000 Upturn: 0.15 × (65,000 - 40,000)² = 93,750,000 Var_B = 191,200,000 σ_B = √191,200,000 = RM13,827.51
3. Coefficient of Variation (CV)
CV_B = 13,827.51 / 40,000 = 0.3457
Projek A lebih baik kerana mempunyai jangkaan pulangan lebih tinggi (RM44.5k vs RM40k) dan risiko (CV) yang jauh lebih rendah berbanding Projek B.
Al Iman Couture (Line Q vs Line R)
Al Iman Couture is considering bringing out a line of designer jeans. Currently it is negotiating with two different well know designers. Because of the highly competitive nature of the industry, the two of jeans have been given code names. After market research, the firm has established the expectations shown in the following table:
| Market Acceptance | Probability | Line Q Return (%) | Line R Return (%) |
|---|---|---|---|
| Very poor | 0.05 | 0.75 | 1.0 |
| Poor | 0.15 | 1.25 | 2.5 |
| Average | 0.60 | 8.50 | 8.0 |
| Good | 0.15 | 14.75 | 13.5 |
| Excellent | 0.05 | 16.26 | 15.0 |
Calculate the expected return, standard deviation and coefficient of variation for both lines. Which appear to have the greater relative risk?
🎀 Line Q Calculations
1. Expected Return E(R)
= (0.05 × 0.75) + (0.15 × 1.25) + (0.60 × 8.50) + (0.15 × 14.75) + (0.05 × 16.26) = 0.0375 + 0.1875 + 5.10 + 2.2125 + 0.813 = 8.3505%
2. Variance & Standard Deviation (σ)
0.05 (0.75 - 8.35)² = 2.888 0.15 (1.25 - 8.35)² = 7.561 0.60 (8.50 - 8.35)² = 0.0135 0.15 (14.75 - 8.35)² = 6.144 0.05 (16.26 - 8.35)² = 3.128 Sum (Variance) = 19.7345 σ_Q = √19.7345 = 4.442%
3. Coefficient of Variation (CV)
CV_Q = 4.442 / 8.3505 = 0.532
🎀 Line R Calculations
1. Expected Return E(R)
= (0.05 × 1.0) + (0.15 × 2.5) + (0.60 × 8.0) + (0.15 × 13.5) + (0.05 × 15.0) = 0.05 + 0.375 + 4.80 + 2.025 + 0.75 = 8.00%
2. Variance & Standard Deviation (σ)
0.05 (1.0 - 8.00)² = 2.45 0.15 (2.5 - 8.00)² = 4.5375 0.60 (8.0 - 8.00)² = 0.00 0.15 (13.5 - 8.00)² = 4.5375 0.05 (15.0 - 8.00)² = 2.45 Sum (Variance) = 13.975 σ_R = √13.975 = 3.738%
3. Coefficient of Variation (CV)
CV_R = 3.738 / 8.00 = 0.467
- CV Line Q: 0.532
- CV Line R: 0.467
- Line Q mempunyai risiko relatif yang lebih tinggi kerana nilai CV-nya lebih besar berbanding Line R. Ini bermakna untuk setiap 1% pulangan yang diperoleh, pelabur menanggung risiko yang lebih tinggi dalam Line Q.