ention 1 Question 4 (20 marks) t yet answered Whed out of 100 Flag question a) AJR Berhad wants to select the less risky of the two alternative investments, Investment A and B the following are the details of the expected performance of the investments from an investment analyst State of economy Probability RA Boom 30% 20% 15% Normal 30% 10% 20% Recession 40% 15% -10% 1 Calculate the expected return of each investment (4 marks) Estimate the risk of each investment (5 marks) 11 b) You are considering establishing an investment portfolio with 80% of the fund invested in Investment A and the remaining in investment B. Calculate the portfolio's expected return based on this asset composition (3 marks) it Calculate the portfolio's risk based on this asset allocation. (3 marks) 1 c) With your answer from part b (11), explain how the effect of portfolio diversification enables an investor to reduce the level of unsystematic risk exposure from specific investments (5 marks) Maximum size for new files 20MB maximum attachments1 non