An investor is now holding shares from Sohar International and NBO. Both shares have the same standard deviation of market index, 10%. The shares from Sohar International have 20% of risk in term of deviation and the shares from NBO have 24%. An expected return of the shares from Sohar International is 25% and An expected return of the shares from NBO is 22%. You are required to:

i) Briefly discuss capital asset pricing model for effective investment decision (10 marks). ii) Calculate expected return of the shares from Sohar International and NBO (5 marks). iii) Draw the market line of the shares from Sohar International and NBO (5 marks).

iv) Critically advise an investor whether to hold or sell the shares (10 marks).