John Black has decided that he will invest his $$400,000$ savings in stocks for $1-$year as follows:

Company Percentage of

investment Expected rate

of return

National Common$-$Sense

Bank

$25\%$

$9\%$

Guardian Lively Limited $25\%12\%$

Treasury Bill $50\%4\%$

Required:

What rate of return should John Black expects to receive on his portfolio? $(15$ marks$)$

What will be the profit$/$gain on John Black$$s initial investment at the end of the $1-$year period?