Ariyanto RP - 1742049
Elen Andriani - 1742035
Erikka - 1742059
Sania Apri Yanti - 1742172
CERTIFICATE IN RISK MANAGEMENT
What is Risk ?
LIKELIHOOD
Pt Pt1 Ct
Kt
Pt1
Kt = tingkat pengembalian yang diharapkan selama periode t
Pt = harga (nilai) asset pada tahun ke t
pt-1 = harga (nilai) asset pada tahun ke t-1
Ct = cash yang di terima dari investasi asset pada peiode t-
1sampai periode t
Suppose an investor named John Smith has wealth of $100,000
that he wants to invest in equities for one year. His broker
recommends two companies, IBM and XYZ. He decides that first he
wants to understand what his wealth would amount to after putting
all his wealth in IBM shares for one year.
Since he puts all his wealth in IBM, his wealth at the end of
the year is (Initial wealth)(1 + Return IBM)
Stock returns are uncertain.
The return of IBM is a random variable.
The statistical tool used to measure the
likelihood of various returns for a stock is
called the stock’s return probability.
Probability is a chance of occurring.
The most common probability distribution
is the normal distribution.
Expected value of return: average return
(probability-weighted average of all the possible
distinct outcomes of that variable).
i1
wi Ri E ( R p )
i1
Unsystematic risk
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