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Please help me to solve this (9) Based on the overall assessment, which portfolio would you recommend? Give your justification based on the risk and

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Please help me to solve this

(9) Based on the overall assessment, which portfolio would you recommend? Give your justification based on the risk and return theory. (3 marks) ODB needs to increase its short-term debt in order to assist its day-to-day operation. ODB decides to compare its liquidity position with its competitor, B4U Berhad (B4UB) to know its possibility to receive the loan from bank. The following is the information on B4UB's total current assets, total liabilities and inventory for each of the past 4 years 2015 2016 Item (RM) (RM) Total current assets 1 69500 219 000 Total current liabilities 90 000 126 000 Inventories 60 000 69 000 Days Sales Outstanding 30 days 35 days Inventory Turnover 6.8 2017 2018 (RM) (RM) 225 000 270 000 126 000 174 000 69 000 72 000 40 days 45 days 7.0 6.4 6.3 (a) Calculate the B4UB's current and quick ratio (acid test) for each year. What is your opinion on the performance on the liquidity of this company? (8 marks) (b) Based on the calculated ratios (ODB and B4UB), what is the possibility of ODB to attain the loan? What actions can they take in order to improve its liquidity position? (4 marks) (c) Would the inventory turnover ratios support or conflict with your evaluation in part (a). Why? (3 marks) (d) Explain the account receivable management of B4UB. What recommendations relative to the amount and the handling of accounts receivable could you make to B4UB? (3 marks) 1. Smith, the financial manager for Barnett Corporation, wishes to evaluate three prospective investments: X, Y and Z. The expected return are as follows. You have been asked for your advice in selecting a portfolio of assets. Probability Asset WA Asset WB 16% Asset WC 12% 0.15 12% 0.55 14% 14% 16% 16% 14% 12% You have been told that you can create two portfolios - one consisting of asset WA and WB and the other consisting WA and WC by investing equal proportions (50%) in each of the two component assets. (a) What is the expected return for each asset? (3 marks) (b) What is the total risk for each asset? (6 marks) (c) What is the risk per unit of return for each asset? (3 marks) (d) What is the expected return for each of the two portfolios? (3 marks) (C) How would you characterize the correlations of returns of the two assets making up cach of the two portfolios? (8 marks) (1) What is the standard deviation for each portfolio? (6 marks)

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