Consider the following portfolio: Share 1: Percentage of Portfolio 40% Beta 1.00 Expected Return 12% share 2:

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Consider the following portfolio:

Share 1: Percentage of Portfolio 40% Beta 1.00 Expected Return 12%

share 2: Percentage of Portfolio 25% Beta 0.75 Expected Return 11%

share 3: Percentage of Portfolio 35% Beta 1.30 Expected Return 15%

(a) Calculate the expected return of the portfolio. (3 marks)

(b) Calculate the beta of the portfolio. (3 marks)

(d) Explain why systematic risk is the relevant risk in a diversified share portfolio. (4 marks)

Posted Date: Jun 09, 2024 08:08 PM

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Consider the following portfolio: Share 1: Percentage of Portfolio 40% Beta 1.00 Expected Return 12% share 2:

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