Determine the expected return and risk of investing, Financial Management

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Question:

The stock of Bax Limited performs relatively well to other stocks during recessionary periods. The stock of Pax Limited, on the other hand, does well during growth periods. Both the stocks are currently selling for Rs100 per share. You assess the rupee return (dividend plus price) of these stocks for the next year as follows:

182_Determine the expected return and risk of investing.png

Required:

Determine the expected return and risk of investing:

(i) Rs 1,000 in the equity stock of Bax Limited
(ii) Rs 1,000 in the equity stock of Pax Limited
(iii) Rs 500 each in the equity stock of Bax Limited and Pax Limited


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