ACCOUNTING AND FINANCE

ASSIGNMENT

Content :
Assignment on Number 8-20

By. Resha Resnandi Raka (42P20022)

Sarah Syauqina (42P20023)
11th Group
Assignment Number 8-20

1. Average Rate of Return for each Stock

Year Stock A Returns, Stock B Returns

2010 -18,00% -14,50%
2011 33,00% 21,80%
2012 15,00% 30,50%
2013 -0,50% -7,60%
2014 27,00% 26,30%
TOTAL 56,50% 56,50%
Divide By Number of
5 5
Years
Average Return 11,30% 11,30%

2. Realized rate of Return on Portfolio

Year Stock A Weighted Return Stock B Weighted Return Realized Return
+ = of Portfolio
2010 -18,00% / 2= -9,00% + -14,50% / 2= -7,25% = -16,25%
2011 33,00% / 2= 16,50% + 21,80% / 2= 10,90% = 27,40%
2012 15,00% / 2= 7,50% + 30,50% / 2= 15,25% = 22,75%
2013 -0,50% / 2= -0,25% + -7,60% / 2= -3,80% = -4,05%
2014 27,00% / 2= 13,50% + 26,30% / 2= 13,15% = 26,65%
TOTAL 56,50% 56,50% 56,50%
Divide By Number
5 5
of Years 5
Average Return 11,30% 11,30% 11,30%

3. Stock and Portfolio Standard Deviation, Coefficient of Variation

a. Stock A Standard Deviation and Coefficient of Variation

Year Stock A Mean Deviations From the Mean Squared

Returns, Return Deviation
2010 -18,00% - 11,30% = -29,30% 0,085849
2011 33,00% - 11,30% = 21,70% 0,047089
2012 15,00% - 11,30% = 3,70% 0,001369
2013 -0,50% - 11,30% = -11,80% 0,013924
2014 27,00% - 11,30% = 15,70% 0,024649
Sum of Squared Deviation = 0,17288
Divide by (n-1) = 4
Variance of Return 0,04322

Standar Deviation of Return = 20,79%

 Divide by Mean Return = 11,30%
Coefficient of Variation = 1,83977

b. Stock B Standard Deviation and Coefficient of Variation

Year Stock B Mean Deviations From the Mean Squared

Returns Return Deviation
-
11,30%
2010 14,50% - = -25,80% 0,066564
2011 21,80% - 11,30% = 10,50% 0,011025
2012 30,50% - 11,30% = 19,20% 0,036864
2013 -7,60% - 11,30% = -18,90% 0,035721
2014 26,30% - 11,30% = 15,00% 0,0225
Sum of Squared Deviation = 0,172674
Divide by (n-1) = 4
Variance of Return 0,04317

Standar Deviation of Return = 20,78%

Divide by Mean Return = 11,30%
Coefficient of Variation = 1,83868

c. Portfolio Standard Deviation and Coefficient of Variation

Year Stock B Mean Deviations From the Mean Squared

Returns Return Deviation
-
11,30%
2010 16,25% - = -27,55% 0,07590025
2011 27,40% - 11,30% = 16,10% 0,025921
2012 22,75% - 11,30% = 11,45% 0,01311025
2013 -4,05% - 11,30% = -15,35% 0,02356225
2014 26,65% - 11,30% = 15,35% 0,02356225
Sum of Squared Deviation = 0,162056
Divide by (n-1) = 4
Variance of Return 0,04051

Standar Deviation of Return = 20,13%

Divide by Mean Return = 11,30%
Coefficient of Variation = 1,78125

4. Sebagai risk-averse investor, kita akan memilih investasi dengan Coefficient of Variation
(CV) yang terendah, karena CV berguna sebagai alat ukur risiko per unit of return. Semakin
rendah CV nya maka semakin kecil risikonya. Dalam kasus ini Portfolio Stock memiliki CV
dengan nilai terendah dan merupakan Investasi terbaik.