(a) An investor wishes to construct a portfolio consisting of a 30 percent allocation to a share index, 30 percent to a bond and a 40 percent allocation to a commodity asset. The return on the commodity asset is 4.5 percent, while rate of return for bond is 6.6 percent and the expected return on the share index is 12 percent. Calculate the expected return on this portfolio. (2 marks) A researcher has determined that a two-factor model is appropriate to determine the return on a share. The factors are the percentage change in GNP and an interest rate. GNP market return is expected to grow by 13.5 percent and interest rate is expected to be 12.9 percent. A share has a beta of 1.2 on the GNP and 0.8 on the interest rate. If the risk-free rate is 11 percent, calculate the required rate of return on the share using APT