An equity analyst is considering investing in two listed companies in Bursa Malaysia, Cloud Berhad $($Cloud$)$ and Point Berhad $($Point$).$ The expected returns on each of these two investments vary depending on economic conditions. The following table shows the expected returns and the likelihood of the economic conditions.

Economic conditions Probability Cloud returns $(\%)$ Point returns $(\%)$

Recession $40\%(8)5$

Normal $45\%1512$

Boom $15\%2820$

b$)$ Calculate portfolio risk and return based on following combination:

i$)70\%$ invested in Cloud, $30\%$ in Point;

$(4$ marks$)$

ii$)50\%$ invested in Cloud, $50\%$ in Point;

$(4$ marks$)$

iii$)30\%$ invested in Cloud, $70\%$ in Point.

$(4$ marks$)$

c$)$ Based on your response above, explain what has happened to the rate of return and risk when moving from individual shares to a portfolio.

$(5$ marks$)$