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An investor has purchased the following assets during the specified dates at the specified closing price for the respective dates: Asset Purchase Date Closing Price

An investor has purchased the following assets during the specified dates at the specified closing price for the respective dates:

Asset

Purchase Date

Closing Price per Unit

Number of units purchased

Shares of Company A

4th July 2019

$1.25 per share

5,000 shares

Shares of Company B

8th August 2019

$0.75 per share

10,000 shares

Shares of Company C

4th September 2019

$10.25 per share

1,000 shares

Cryptocurrency D

11th November 2019

$250 per unit

100 units

On the 10th July 2020, the investor sold all the assets at the following respective closing prices:

Asset

Selling Date

Closing Price per Unit

Shares of Company A

10th July 2020

$1.15 per share

Shares of Company B

10th July 2020

$1.25 per share

Shares of Company C

10th July 2020

$14.10 per share

Cryptocurrency D

10th July 2020

$220 per unit

You are also given the following information about dividend payment from the shares:

Asset

Dividend Payment Date

Dividend Paid

Shares of Company A

11th July 2019

$0.05 per share

21st January 2020

$0.05 per share

8th July 2020

$0.07 per share

Shares of Company B

11th July 2019

$0.10 per share

7th July 2020

$0.10 per share

Shares of Company C

15th July 2019

$2.50 per share

5th February 2020

$2.20 per share

17th July 2020

$1.50 per share

Considering the above information, answer the following:

  1. Determine holding period return (HPR) for the investor for each asset considering the specified purchase/sell prices and any income from the assets applicable for the dates. [4 assets x 1 mark = 4 marks]
  2. Assume the holding period returns determined for each asset in (a) are also the expected returns for these assets for the foreseeable future. Also consider the proportion of investors investment across the different assets based on the given purchase price and the number of units purchased. If a portfolio has the same proportion of investment across these assets, what is the expected return of that portfolio? [2 marks]
  3. Consider the value determined in (b). If the risk-free rate of return is 2.5% and the market risk premium is 11%, what is the beta of the portfolio in (b)? [2 marks]

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