1. What does a perfect negetif correlation indicate?

Perfect positive correlation (+1.0) refers to two variables moving in the same directions
and with the same magnitude. Combining two perfectl positive correlated assets does
not help to reduce ris!. "efer #ub$%opic &.'.(.
%he correlation coefficient is a measure of the degree to which two variables )move*
together that is the movement of returns on financial assets. +t has a numerical value
that ranges from
$1.0 to 1.0. , combining two perfectl negative correlated assets- the overall portfolio
ris! can be completel eliminated. "efer #ub$%opic &.'.(.
#o- perfect negative correlation is a two variables moving in opposite directions but with
the same magnitude.
'. .au/iah plans to invest in share 0 and share , based on the following economic
condition
(Fauziah bercadang untuk melabur di saham Seri A dan B
saham berdasarkan keadaan ekonomi yang berikut)
1conomic
condition
Probabilit2
!emung!inan
"ate of return
share 0
"ate of return
share ,
#trong 0.6 134 (4
wea! 0.4 54 1'4
What is the e6pected return for #hare 0 and #hare , respectivel?
(Apakah hasil yang diharapkan untuk Saham A dan B masing-
masing ?)
Expected return or Share A and Share B
Share A ! "0.6 (#$%)& ' "0.4 ( (%)&
! )*$% ' +*$%
! #,*)% kadar pulangan terjangka aset kewangan A
Share B ! "0.6 x( -%)& ' "0.4 (#+%)&
! $*+% ' $*)%
! .% kadar pulangan terjangka aset kewangan B
7. .au/ian plans to form an investment portfolio that comprised of &04 investment in share 0 and
&04 in share , based on the following economic conditions
(Fauzian bercadang untuk membentuk suatu portfolio pelaburan yang terdiri daripada
pelaburan 50% di saham A dan 50% di saham B berdasarkan pada keadaan ekonomi
menyusul)
1conomic
condition
Probabilit2
!emung!inan
"ate of return
share 0
"ate of return
share ,
#trong 0.5 134 (4
wea! 0.3 54 1'4
What is the e6pected return for investment portfolio of share 0 and share ,?
Apakah hasil yang diharapkan untuk portfolio pelaburan saham A dan saham B?
/he 0rong ans0er1
Step#1 Expected return or share A and share B2
Share A ! (,*( x #$%) 3 (,*( x -%)
! )*$% - $*+%
! $*+%
Share B ! (,*$ x (%) 3 (,*$ x #+%)
! +*$% - $*)%
! - +*$%
Step +1 Expected return or portolio consisting o 4,% share A and 4,% share B2
! (,*4 x $*+%) ' (,*4 x 3+*$%)
! +*#% ' (-#*+%) ! ,*.%
This is wrong because, Calculation is based on strong and weak economic condition and wrong
formula (minus sign) 5eer Sub-/opic 4*$*+
/he correct ans0er is1
Step #1 Expected return or Share A and Share B
Share A ! ",*( x (#$%)& ' ",*$ x ((%)&
! )*$% ' +*$%
! #,*)% kadar pulangan terjangka aset kewangan A
Share B ! ",*( x (-%)& ' ",*$ x (#+%)&
! $*+% ' $*)%
! .% kadar pulangan terjangka aset kewangan B
Step +1 Expected return or portolio consisting o 4,% Share A and 4,% Share B ( port )
! ",*4 ( #,*)%)& ' ",*4 ( .%)&
! 4*$% ' $*4%
( port ) ! .*.% Refer SubTopic !"#"$
$* Fauziah plans to orm an in6estment portolio that comprised o 4,% in6estment in share A and
4,% in share B based on the ollo0ing economic conditions*
Fauziah bercadang untuk membentuk suatu portfolio pelaburan yang terdiri daripada
pelaburan 50 di saham A dan 50 dalam B saham berdasarkan keadaan ekonomi yang
berikut.
1conomic
condition
Probabilit2
!emung!inan
"ate of return
share 0
"ate of return
share ,
#trong 0.5 134 (4
wea! 0.3 54 1'4
7hat is the standard de6iation or the in6estment portolio o share A and share B?
Apa standard de!iasi untuk portfolio pelaburan saham A dan saham B?
8iketah0i9
portolio pelaburan utk saham A ! 4,% ! ,*4
portolio pelaburan utk saham B ! 4,% ! ,*4
"tep #$ find the !ariance % : port
+
&
8adar pulangan ter9ang!a portfolio dlm situasi e!onomi !u!uh
: 0.&(134) + 0.&((4)
: ( + 7.&
: 10.&4
8adar pulangan ter9ang!a portfolio dlm situasi e!onomi lemah
: 0.&(54) + 0.&(1'4)
: 7 + 5
: ;4
<leh itu varian-
: port
+
! ; kukuh (8adar pulngan t=9ang!a portfolio dlm e!onomi !u!uh $ port )
+
'
; lemah (8adar pulngan t=9ang!a portfolio dlm e!onomi lemah $ port )
+
: 0.5 (10.&4 $ ;.;4)
'
+ 0.3 (;4 $ ;.;4)
'

: 0.5(0.75) + 0.3(0.>1)
: 0.'15 + 0.7'3
: 0.54%
"tep '$ (et the standard de!iation

: port
+
! < ,*4$
! 0.)*4
&. %he ordinar share of .%C ,erhad has e6pected return of 13.34. %he return on
the mar!et is 104 and the ris!$free rate of return is 7.&4.
What is the beta of this ordinar share?
!aham biasa dari F"# Berhad telah diharapkan pulangan sebanyak $4.4%.
%ulangan daripada pasaran adalah $0% dan kadar pulangan tanpa&risiko
adalah '.5%.
Apakah beta saham ini(
Expected return = rf (rm - rf)
14.4 = 3.5 + (10 -3.5)
= (14.4 3.5 )/6.5 = 1.677 1.68
5. Putra #dn ,hd is considering two mutuall e6clusive pro9ect. %he cash flow
associated with these pro9ects are as follows?
Pro9et 0 Pro9ect ,
+nitial
+nvestment
"@(0-000 "@100-000
Cash +nflow
Aear 1 '0
Aear '
Aear 7
Aear 3
Aear &