2 Dimas Sdn Bhd is planning to investment into three securities in the Bursa Malaysia. You as an executive finance of Dimas Berhad. The following table shows their possbile payoffs: Return on Return on State of Economy Probability Security A Security B Boom 55% 20% 25% Good 30% 15% 20% Poor 15% 25% 10% Required: a) Compute the expected return and standard deviation of each security. b) The director suggested that the company should invest one third of its fund for Security A and the remaining for Security B. Calculate the expected return and standard deviation of this portfolio. c) Khaleeda, your friend has furnished you with some of the data relating to the company she is planning to invest as shown below. Company Beta Expected Return Burwood 0.6 7.2% Chadstone 1.24 19.2% Dandenong 0.96 8.8% Additional note: 1. The Malaysian Treasury Bill is 3 percent and the market risk premium is 7 percent. Required: i. Advise Khaleeda on the best stock to invest based on the CAPM