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(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

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(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)

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