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a. By investing in different securities, an investor can lower his/her exposure to risk. Do you agree with this statement? Explain your answer using your
a. "By investing in different securities, an investor can lower his/her exposure to risk". Do you agree with this statement? Explain your answer using your own words and understanding. b. Consider the following information about three stocks: From the information given, you are required to answer the following questions. i. Compute the Standard Deviation for each stock. ii. Compute the Coefficient Variation for each stock. iii. Based on your computation in part (i) and (ii), which stock is riskier? Explain your answer. iv. Assume that you have RM14,000 invested in Stock Hang Jebat whose beta is 1.5, RM19,000 invested in Stock Hang Kasturi whose beta is 2.5 and RM17,000 invested in Stock Hang Tuah whose beta is 1.6. Determine what is the beta of this portfolio. v. Based on your answer in part (iv), compute the required rate of return for this portfolio, given that the market rate of return is 13% and risk-free rate is 5%
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