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Kamloops Investments is a shareholder in five different companies (A-D). The details of its investments are provided in the table below. Table: Investments in

 

Kamloops Investments is a shareholder in five different companies (A-D). The details of its investments are provided in the table below. Table: Investments in shares A-E SHARE AMOUNT INVESTED K000 2000 ABCDE 4000 6000 8000 5000 PERCENTAGE (%) 25 10 15 20 30 EXPECTED RETURN BETA (%) FACTOR 16 24 30 36 10 0.7 0.9 1.2 1.4 0.95 Required: a) Calculate the expected return on the above portfolio of shares. b) Differentiate between systematic risk and unsystematic risk c) Explain the use of the Beta Factor. d) Calculate the Beta of the above portfolio of shares and interpret your results. (5 marks) [Total: 20 marks] (3 marks) (6 marks) (6 marks)

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a To calculate the expected return on the portfolio of shares we need to calculate the weighted average of the expected returns of each share where th... blur-text-image

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