Evaluating Investment Returns and Risks in the Financial Industry
DOI:
https://doi.org/10.22441/indikator.v10i1.40519Keywords:
Expected Return, Investment Risk, Risk Preference, Banking Sector, Investment DecisionAbstract
This study aims to provide insights for investors in making informed decisions regarding the allocation of their investment funds. Investment risk arises from the discrepancy between expected returns and actual returns, as uncertainty in economic conditions may lead to unfavorable outcomes. Investors generally perceive investments as less risky when macroeconomic indicators are stable, characterized by controlled inflation, a stronger exchange rate, and lower interest rates. In making investment decisions, investors seek returns in the form of dividends and capital gains, while their choices are largely influenced by their individual risk preferences. This research classifies economic conditions into five categories: (1) recession, (2) moderate recession, (3) normal, (4) good, and (5) excellent. The findings indicate that under all economic scenarios, shares of BNGA (PT CIMB Niaga Tbk) offer the highest expected returns, whereas BBCA (PT Bank Central Asia Tbk) presents the lowest level of risk. Consequently, investors with a high tolerance for risk are more likely to choose BNGA, while risk-averse investors tend to prefer BBCA due to its relatively safer investment profile.
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