(All or none)

Link Investments Limited, the company that you incorporated two years ago was selected by Norman Frank for investment advice. Frank provided you with data, which he received from a friend but was unable to use it due to his limited knowledge of finance. Given that the risk-free rate of interest is 6%, the market rate of return is 12% and the standard deviation of the market is 50%. Using the data in the table, provide the values and analysis for Frank Stock Expected Price 27 SNB BMM TTR MFJ VCT % of Portfolio COV (Ri, Rm) Current Price 20% 0.175 25 30% 0.25 40 15% 0.2875 33 25% 0.35 64 10% -0.075 50 Expected Dividends 0.50 0.50 1.00 1.10 42 39 65 54 a) Calculate the beta for each stock (5 Marks) b) Calculate the estimated return for each stock. (5 Marks) c) Calculate the required return for each stock. (5 Marks) d) Calculate the alpha for each stock, then advice Frank if the stocks are underpriced or overpriced and what possible action to be taken based on these results. (5 Marks) e) Using the values from (b) above calculate the estimated return of the portfolio consisting of all five stocks (2 Marks) f) Using the values from a) above calculate the beta of the portfolio consisting of all five stocks. Comment on the results