d) Based on the information provided, do you expect the portfolio that has been constructed to be efficient? State your reasons.

Question 2 (12 marks) Bundry Ltd, Rumsy Ltd and Pepsi Ltd are publicly traded beverage companies. Summary information relating to these companies and the market is as follows. Company Beta Return Bundry Rumsy Pepsi Market Risk free 0.8 1.1 1.6 Standard Deviation of return 18% 26% 40% 20% 12% 4% A portfolio comprising 30% of Bundry Ltd, 45% of Rumsy Ltd and 25% of Pepsi Ltd has been constructed