Answered step by step
Verified Expert Solution
Question
1 Approved Answer
(5 marks) c) Mr. Sendiki is currently holding a portfolio consisting of shares of four companies quoted at the Nairobi Securities Exchange. Company W Number
(5 marks) c) Mr. Sendiki is currently holding a portfolio consisting of shares of four companies quoted at the Nairobi Securities Exchange. Company W Number of shares held 22,000 28,000 28,000 15,000 Equity beta Market price per Expected return factor share (Ksh) next year (%) 1.2 65 19 0.79 50 24 0.72 45 11 1.60 80 17 Y Z The current market return is 14% p.a. and the teasury bills yield is 9% p.a 1) Calculate the risk of Mr.Sendiki's portfolio relative to that of the market (10 marks) II) Use a diagramto show where these securities appear on the security market line(SML)(10 marks) iii) Explain whether or not Mr.Sendikil should change the composition of his portfolio (10 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started