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2 (15 marks) Two Oceans Investments (Pty) Ltd is a portfolio management company investing in publicly traded shares, trading on the Johannesburg Stock Exchange. As
2 (15 marks) Two Oceans Investments (Pty) Ltd is a portfolio management company investing in publicly traded shares, trading on the Johannesburg Stock Exchange. As an analyst, you are asked to review and advise on the below investments. The risk-free rate is 8%. R1 800 000 is available to invest in a portfolio of 3 shares, of which the details are as follows: Economy scenario Recession Below Average Average Above Average Boom Beta Probability 0.1 0.2 0.4 0.2 0.1 Moss Industrial (MI) -20% -1.5% 18% 30% 42% 1.29 Fintech Systems (FS) 45% 13% 0% -15% -18% -0.86 Orpen Storage (OS) 11% -5% 5% 35% 28% 0.68 Market -13% 1% 15% 29% 42%
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