PART I. PROBLEM SOLVING

Direction: Read and analyze the problem/case and answers the question/s or requirement stated. Choose your answers clearly. (3x3=9marks)

Consider the following investments

Investment	Expected returns(r)	Standard Deviation
A	5%	10%
B	7%	11%
C	6%	12%
D	6%	10%

Q1 . Refer to the investment analyze select the investments you will choose from A and D (3 marks)

Q 2. Refer to details in Qs11.Analyze from the given investments and decide which you will choose from B and C (3 marks)

Q 3. Refer to details given in Q 1. Analyze from the given the investments and decide which you will choose from C and D (3 marks)

Consider a portfolio comprised of three securities in the following proportions and with the indicated security beta

Security	Amount received(p)	Beta(B)	Expected return(r)
A	$1.5 Million	1.0	12%
B	$1.0 Million	1.5	13.5%
C	$2 Million	0.8	9%

Q 4. Estimate the portfolio beta? (3 marks)

Q 5. Refer to the problem given in q13. Estimate the portfolios expected return? (3 marks)

( Marking Scheme;; 1 mark for correct answer and 2 marks for calculation=3 marks)