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a. Smart Car CO. is a US-based firm selling cutting-edge electronic cars globally. Based on a report by the international Energy Agency (IEA), 2021, sales

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a. Smart Car CO. is a US-based firm selling cutting-edge electronic cars globally. Based on a report by the international Energy Agency (IEA), 2021, sales of electric vehicles nearludoubled in 2020. Sales to 6.6 million (a sales share of nearly 9\%), bringing the number of on the road to 16.5 million. Smart Car CO. therefore sees the industry report as an opportunity to go global. The Model A, a single model produced by the Smart Car Co. is a top selling in the U.S. market hence they are considering expanding its operation to Southeast Asia region, specifically Malaysia or Thailand. Based on the recent financial statistics report, Smart Car Co, records a systemic risk of 1.2 and 1.3 to the Kuala Lumpur Composite Index (KLCI) and Stock Index of Thailand (SET) respectively, and the regional equities are expected to close the year 10% higher in 2023. The 10Y Malaysia Govemment Bond and Thailand Treasury Bill and Government Bond Yield are trading at 3.92% and 2.58% respectively. The company is expecting to reap an 8% return in a good economy while a 3% retum during economic distress and the probability distribution is weighted equally in both economic outlooks. Required: i. Determine the required rate of returns and coefficient of variations for investing in Southeast Asia. Comment on the financial acceptability based on the investment riskiness and risk-return trade-off. (27 marks) ii. Portfolio risk is a term used to describe the potential loss of value or decline in the performance of an investment portfo due to various factors. Determine two (2) types of portfolio risk

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