E Soalan (Question) 1 1.(Ahmad is considering to buy one of two laptops HH and DEPP. Both laptops could benefit over an 8 years period and each requires an initial investment of RM4,750 for HH and RM4,600 for DEPP. Details of estimates of rates of return and probabilities for optimistic, most likely and pessimistic provided): Laptop HH Laptop DEPP Jumlah (Probability) (Amount) (Probability) (Amount) 1.00 RM 4,750 1.00 RM 4600 (Initial Investment) (Rate of return annual) 0.40 45% 0.40 35% (Optimistic) 0.30 30% 0.35 30% (Most likely) 0.30 15% 0.25 25% (Pessimistic) A.(Calculate the range for the rate of return for laptops HH & DEPP.) (2 markah/ marks) B.(Calculate the expected value of return for laptops HH & DEPP.) (10 markah/ marks) C.(Which of the laptop is riskier to buy? Explain.) (2 markah/ marks) 2.(There are some less risky assets in the portfolio of XYT BhD company that can cause the beta value to decrease by 25% where the initial beta value is 1.50. Also stated, the required initial required rate of return is 13.90%. and the market risk premium is 7.40%. In addition, inflation is also expected to decline by 0.55%. Using the data provided, what is the stock's new required rate of return?) (5 markah/ marks) 3.(Following is the portfolio held by Suzi)] * * AAAAAAAAAAAAAAAA Stok (Stock AA BB CC DD Pelaburan (Investment (RM) 175,300 123,320 + 200,530 63,400 + (The beta value for Stock AA is 1.530, Stock BB is 0.940, Stock CC is 1.390 and Stock DD is 1.000. Suzi plans to sell AA Stock and replace it with EE Stock, which has a beta of 0.880. By how much will the portfolio beta change? Please round your answer to 3 decimal places) (6 markah/ marks) [TOTAL 25 MARKAH / MARKS] E Soalan (Question) 1 1.(Ahmad is considering to buy one of two laptops HH and DEPP. Both laptops could benefit over an 8 years period and each requires an initial investment of RM4,750 for HH and RM4,600 for DEPP. Details of estimates of rates of return and probabilities for optimistic, most likely and pessimistic provided): Laptop HH Laptop DEPP Jumlah (Probability) (Amount) (Probability) (Amount) 1.00 RM 4,750 1.00 RM 4600 (Initial Investment) (Rate of return annual) 0.40 45% 0.40 35% (Optimistic) 0.30 30% 0.35 30% (Most likely) 0.30 15% 0.25 25% (Pessimistic) A.(Calculate the range for the rate of return for laptops HH & DEPP.) (2 markah/ marks) B.(Calculate the expected value of return for laptops HH & DEPP.) (10 markah/ marks) C.(Which of the laptop is riskier to buy? Explain.) (2 markah/ marks) 2.(There are some less risky assets in the portfolio of XYT BhD company that can cause the beta value to decrease by 25% where the initial beta value is 1.50. Also stated, the required initial required rate of return is 13.90%. and the market risk premium is 7.40%. In addition, inflation is also expected to decline by 0.55%. Using the data provided, what is the stock's new required rate of return?) (5 markah/ marks) 3.(Following is the portfolio held by Suzi)] * * AAAAAAAAAAAAAAAA Stok (Stock AA BB CC DD Pelaburan (Investment (RM) 175,300 123,320 + 200,530 63,400 + (The beta value for Stock AA is 1.530, Stock BB is 0.940, Stock CC is 1.390 and Stock DD is 1.000. Suzi plans to sell AA Stock and replace it with EE Stock, which has a beta of 0.880. By how much will the portfolio beta change? Please round your answer to 3 decimal places) (6 markah/ marks) [TOTAL 25 MARKAH / MARKS]