4. You bought a share for $53. After 1 year, you sold the share for $57.5. The share paid a $1.5 dividend. i. What was your total dollar return? Show all work and formula(s) clearly. (1 mark)

ii. What was your total percentage return? Show all work and formula(s) clearly. (1 mark) Click here to enter text.

b) Suppose the risk-free rate is 2.5%, the expected market return is 12.5%, and New Borns share has a beta of 0.8.

i. Based on the CAPM, what is the expected return on this share? Show all work and formula(s) clearly. (2 marks)

ii. Compare the beta and expected return of this share with the market beta and expected market return. Relate these figures with the concept of risk and expected return. [Note: The discussion must be in your own words. Word limit: 60 words, excluding figures; answers beyond word limit will not be marked.] (2 marks)

c) You have $100,000 to invest in a share portfolio. Your choices are shares in A.G. Ltd, with an expected return of 13.25%, and shares in S.S. Ltd, with an expected return of 8.5%.

i. If your goal is to create a portfolio with an expected return of 11.5%, how much money will you invest in A.G. Ltd? In share S.S. Ltd? Show all work and formula(s) clearly. (Do not round intermediate figures including the weights.) (3 marks)

ii. Which share has a heavier weight? Relate the expected return of the share with a heavier weight with your desired expected portfolio return. Briefly explain your observation. [Note: The discussion must be in your own words. Word limit: 30 words, excluding figures; answers beyond word limit will not be marked.] (1 mark)