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b) Consider the following data for two (2) risk factors: Changes in growth domestic product (GDP) and Government service tax (GST) and three (3) securities:

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b) Consider the following data for two (2) risk factors: Changes in growth domestic product (GDP) and Government service tax (GST) and three (3) securities: Kossan Bhd., Top Glove Bhd. and Lafarge Bhd. T. bills = 0.02 Pkossan, GDP = 0.80 GDP = 0.12 Pkossan, GST -0.00 GST = 0.06 1.2 TopGlove, GDP B B TopGlove, GST-0.00 Lafarge, GDP = 0.3 PLafarge, GST-0.2 1. Compute the expected returns for Kossan Bhd., Top Glove Bhd, and Lafarge Bhd. (6 marks) ii. Supposed that Kossan, Top Glove and Lafarge are currently priced at RM6, RM5 and RM9 respectively. Further, it is expected that all securities will pay dividend of RM0.50 during the coming year. What is the expected price of each security one year from now? (9 marks)

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