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please help me with this Question 2 a. Puan Siti Khadijah is holding a portfolio made up of the following stocks: Investment amount Beta (RM)
please help me with this
Question 2 a. Puan Siti Khadijah is holding a portfolio made up of the following stocks: Investment amount Beta (RM) Stock Abu Berhad 2,000 1.5 Stock Bakar Berhad 5,000 1.2 Stock Chan Berhad 3,000 0.80 From the above information, you are required to answer the following questions. 1. What is the beta of the portfolio? (2 Marks) ii. Based on you answer in part (1), given that the market's expected return is 15%, and the risk-free rate is 6%. Compute the expected return on this portfolio using capital asset pricing model (CAPM). (2 Marks) b. Puan Siti Aminah is going to invest all her funds in one (1) of three projects with the following distribution of possible returns: Project Sakit Hati Project Makan Hati Project Suka Hati Probability Rate of Probability Rate of Probability Rate of return return return 0.50 20% 0.30 30% 0.10 30% 0.50 -4% 0.40 10% 0.40 15% 0.30 -20% 0.40 10% Based on the above information, calculate each project's expected rates of return and its standard deviation. From the calculation, which one of project is the better choice for Puan Siti Aminah? Explain your answer. (6 Marks) Step by Step Solution
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