RISK

Lessons From Market History

Created by :
1. Libert Hutahaean (041914353041)
2. Erwin Indra P (041914353009)
PREVIEW

With the S&P 500 Index returning about 19 percent and the
NASDAQ Composite Index up about 28 percent in 2017, stock
market performance overall was very good. In particular, investors in
biopharmaceutical company Madrigal Pharmaceuticals, Inc., had to
be happy about the 516 percent gain in that stock and investors in
genomic therapy company Sangamo Therapeutics had to feel pretty
good following that company’s 438 percent gain. Of course, not all
stocks increased in value during the year. Stock in Sears Holdings
fell 61 percent during the year and stock in Under Armour dropped
48 percent.
RETURN

Total Return = Divident + Capital Gain / Capital

Loss
TOTAL RETURN PERCENTAGE
TOTAL
DIVIDENT CAPITAL GAIN
RETURN
PERCENTAGE
= YIELD + PERCENTAGE
Example :
Price stock begin (P0) $25/share; Price stock end (P1) $35/share
Divident (D1) $2/share

DIVIDENT 𝐷1 2
YIELD = 𝑃0
=
25
= 0,08 = 8%
(𝑃1−𝑃0) (35−25)
CAPITAL GAIN
PERCENTAGE = 𝑃0
=
25
= 0,40 = 40%

TOTAL RETURN
PERCENTAGE = 8% + 40% = 48%
RETURN STATISTICS

Frequency distribution Arithmetics Average Return

RISK-FREE RETURN

Theoretical return attributed to an investment that provides a guaranteed

return with a zero risk. That represents the interest on an investor’s money
that would be expected from an absolutely risk-free investment over a
specified period of time
RISK STATISTICS
To measure risk in return we are using VARIANCE and STANDARD
DEVIATION

Risk Statistics parameter, VARIANCE and STANDARD DEVIATION using

to compare risk between the other return in stock market
SHARPE RATIO
Referred to as the reward-to-risk ration where the reward is the average
excess return.
CASE STUDY

9
CASE STUDY

10
 CASE STUDY
10-year Standard Fund
Funds Additional Info
Annual Return Deviation Charges
Bledsoe S&P 500 Index Fund 11,04% 18,45% 0,15% a. follow tracks S&P 500 return

a. small capitalizatition
Bledsoe Small-Cap Fund 16,14% 29,18% 1,70% b. more volatile
c. 10% assets in companies based outside US

a. large capitalization
Bledsoe Large-Company Stock Fund 12,15% 24,43% 1,50% b. outperformed in 6 of the last 8 years

a. long term bonds

Bledsoe Bond Fund 6,93% 9,96% 1,40% b. investment grade rating

Company Stock Fund (Expected) 16% 58% free a. go public in next 3-4 years

11
ANSWER 1 : Advantage of Mutual Fund

Keunggulan investasi pada produk reksadana

adalah investasi akan ditempatkan ke dalam
beberapa instrument investasi yang berbeda
atau disebut diversifikasi asset. Bentuk
investasi dalam beberapan asset tersebut juga
untuk meminimalisir resiko yang didapat.

12
ANSWER 2

Investasi 5% dari gaji = 5% x $ 50.000 = $ 2.500

Kontribusi perusahaan = 5% x $ 50.000 = $ 2.500

Total Investasi = $ 5.000 / year

Funds 10-year Annual Return Fund Charges Return

Bledsoe S&P 500 Index Fund 11,04% 0,15% 544,5

Bledsoe Small-Cap Fund 16,14% 1,70% 722

Bledsoe Large-Company Stock Fund 12,15% 1,50% 532,5

Bledsoe Bond Fund 6,93% 1,40% 276,5

Company Stock Fund (Expected) 16% free 800

Estimation Average Return (EAR) 575,1

13
ANSWER 3 : Large-Company Stock vs S&P 500

Keunggulan investasi di reksadana saham

Bledsoe Large-Company Stock Fund adalah
tingkat return lebih besar dibandingka index
S&P 500. Tetapi reksadana saham juga
berpotensi tingkat return lebih rendah
dibandingkan indeks saham acuan. Saat ini,
reksadana saham Bledsoe S&P 500 memiliki
tingkat return yang lebih stabil

14
ANSWER 4: Bledsoe Small-Cap Fund

Investasi pada reksadana saham Bledsoe

Small-Cap Fund merupakan pilihan yang
terbaik karena memiliki tingkat return yang
tinggi meskipun juga memiliki tingkat risiko
yang tinggi pula. Karakteristik personil fresh
graduates dengan sisa masa kerja yang masih
panjang merupakan faktor yang dapat
dipertimbangkan. Sehingga, di suatu waktu
investasi dapat dialihkan pada produk
investasi lainnya dengan return dan risiko yang
lebih stabil 15
 ANSWER 5 : Measure Sharpe Ratio

10-year Annual Standard Equity Risk Sharpe Fund

Funds
Return Deviation Premium Ratio Charges
1 2 3 4 = 3 :2

Bledsoe S&P 500 Index Fund 11,04% 18,45% 7,84% 0,42 0,15%
Bledsoe Small-Cap Fund 16,14% 29,18% 12,94% 0,44 1,70%

Bledsoe Large-Company Stock Fund 12,15% 24,43% 8,95% 0,37 1,50%

Bledsoe Bond Fund 6,93% 9,96% 3,73% 0,37 1,40%
Company Stock Fund (Expected) 16% 58% 12,80% 0,22 free

16
ANSWER 6 : Portfolio Assets Fund

5% Bledsoe S&P 500 Index Fund

20% Bledsoe Small-Cap Fund

Bledsoe Large-Company Stock Fund

10% 60% Bledsoe Bond Fund

5% Company Stock Fund

a. Pension = long term assets

b. Sharpe ratio
c. Fund Charges
d. Standard deviation
e. Annual return 17