4POT1_041140597_TMA-1.docx - QUESTION 1 4 companies that I have chosen which are Public bank berhad Genting Malaysia berhad maxis berhad and Ivory

4POT1_041140597_TMA-1.docx - QUESTION 1 4 companies that I...

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QUESTION 1 4 companies that I have chosen which are Public bank berhad, Genting Malaysia berhad, maxis berhad and Ivory Properties group berhad. And I got the history prices from 31 December 2012 until 12 December 2015, which 3 years of it.
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Question 1(a) Public bank berhad Genting Malaysia berhad Maxis berhad Ivory properties group berhad Average return 0.04% 0.046% 0.026% -0.005% Standard deviation 0.665% 1.535% 0.898% 2.01% Correlation Correlation with genting Malaysia berhad =18% Correlation with Maxis beerhad =16.34% Correlation with Ivory properties group berhad =13.63% Correlation with Public bank berhad =13.51% Question 1(b) Public bank berhad Genting Malaysia berhad Maxis berhad Ivory properties group berhad Average return 0.88% 0.79% 0.53% -0.24% Standard deviation 2.88% 3.28% 2.94% 7.83% Correlation Correlation with genting Malaysia berhad =21.20% Correlation with Maxis beerhad =28.04% Correlation with Ivory properties group berhad =19.31% Correlation with Public bank berhad =22.02%
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Question 1© Based on the research showing in part a and b, we can see the average return for the 4 companies over the last 3 years was 0.04%, 0.046%,0.026%, and -0.005% for daily average return and 0.88%, 0.79%.0.55% and -0.24% for monthly average return. Standard deviation seeks to measure the volatility by calculate how “far away” the returns tend to be from the average over time. Standard deviation is a measure of risk that an investment will not meet the expected return in given period. The smaller the standard deviation, the less volatile of a stock. Thus is may be a way to determine whether to buy or sell a stock. As daily standard deviation are 0.665%, 1.535%, 0.898% and 2.01 %. Next is calculate how the risk per return is, by using return divide by standard deviation. Which are Public bank berhad get 0.06% return per risk, Genting Malaysia berhad get 0.03% return per risk, Maxis berhad get0.029%, and Ivory properties group get -0.002%. Thus, a rational investor will choose to invest in Public bank berhad, it is because of public bank berhad offer a highest return with lowest risk. On the other hand, Ivory properties group berhad, a property group, will be less favorable by those conservative investors. It is because of the risk is the highest among these 4 stocks. Well, for maxis and genting stock, it provide a stable return to investor but genting stock is a little bit higher return that maxis stock. Well, invest in shares is quite risky as it risker that invest in bonds. We should always bear in mind, “buy low sell high” concept is quite useful in investment.
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  • Winter '16
  • Winnie Wong
  • Economy of Malaysia, Maxis Berhad, Public Bank Berhad

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