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Portfolio: P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 Stock A 100% 90% 80% 70% 60% 50% 40% 30% 20% 10%

 

Portfolio: P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 Stock A 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Stock B 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Beta Required Return BP1 BP2 BP3 BP4 BP5 BP6 BP7 BP8 BP9 BP10 BP11 RP1 RP2 RP3 RP4 RP5 RP6 RP7 RDP8 RP9 RP10 RP11 (22 marks) (b) Which portfolio(s) is/are good to create? Provide a reason. (c) Which portfolio(s) is/are overvalued and undervalued? (4 marks) (11 marks)

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