Question
Given the following information for 5 short-listed securities and the returns of Tbills and market index Security Exp Return, % % A 25.00 1.65 54
Given the following information for 5 short-listed securities and the returns of Tbills and market index Security Exp Return, % % A 25.00 1.65 54 B 27.00 1.35 42 C 24.00 1.15 35 D 18.00 0.95 22 E 16.00 1.12 25 Market Index 15.00 1.00 22 T-bill 5.50 0.00 00 (a) For equally weighted portfolio of five securities, find the following: (i) Return (ii) Beta (iii) Systematic risk (iv) Unsystematic risk (v) Total risk (b) What would happen to the risk and return if the investor borrows 50% at the risk-free rate and invests in the same portfolio? Which equity is riskier?Explain
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