(a) Based on the data provided nd an estimate of beta for each company. For this you will have to rst calculate the covariance of a company's returns with the A5X200 index. Use the following formula in excel: i, covariance (Return of company X , Return of ASX 200) Beta's can then be calculated by _ Covariance (Returnof Company X ,Return of ASX 200) Wrianceheturnof ASX 200) x (b) Briey explain why each company has high/low values of beta. Part 4 Forecast 8: Investment strategy [10 Marks = 7 + 3 marks] The research department of Tri-Star Management has come up with the following forecast of the share prices and the ASX200 index for the month of June 2018: Jun-18 6227.60 3.56 29.22 H 75.17 l 28.20 H 6.72 They have also concluded that in 2018, the annual risk free rate is going to be steady at 1.5%. (a) Based on the forecasts given above. write a short report for the clients of Tri-Star Management. Your report should be approximately 500 words long and contain: (i) an assessment of risk of each company, (ii) an evaluation whether a share is overpriced, underpriced or correctly priced and (iii) your recommendation regarding investment in these companies