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A holds the following portfolio: Share/ Bond Beta Initial Price Dividends Rs. Market Price at end of year Rs. Rs. Epsilon Ltd. 0.8 25 2
A holds the following portfolio: Share/ Bond Beta Initial Price Dividends Rs. Market Price at end of year Rs. Rs. Epsilon Ltd. 0.8 25 2 50 Sigma Ltd 0.7 35 2 60 Omega Ltd. 0.5 45 2 135 GOI Bonds 0.01 1,000 140 1,005 The expected rate of return of each security using Capital Assets Pricing Method (CAPM) The average return of his portfolio. Risk free return is 14% Calculate: (1) (ii) A holds the following portfolio: Share/ Bond Beta Initial Price Dividends Rs. Market Price at end of year Rs. Rs. Epsilon Ltd. 0.8 25 2 50 Sigma Ltd 0.7 35 2 60 Omega Ltd. 0.5 45 2 135 GOI Bonds 0.01 1,000 140 1,005 The expected rate of return of each security using Capital Assets Pricing Method (CAPM) The average return of his portfolio. Risk free return is 14% Calculate: (1) (ii)
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