Stock of BKM Limited performs relatively well to other stocks throughout recessionary periods. The stock of PKM Limited, on other hand, does well throughout the 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:
problem 1: Compute the expected return and risk of investing:
I. Rs 1,000 in the equity stock of BKM Limited
II. Rs 1,000 in the equity stock of PKM Limited
III. Rs 500 each in the equity stock of BKM Limited and PKM Limited
problem 2: Make a distinction between systematic risk and unsystematic risk.