Principles of Finance Question

a. Common stock of Anggun Amat Berhad (AAB) has a conservative beta of 0.90, while common stock of Bijak Bestari Berhad (BBB) has a beta of 1.8. The risk-free rate is 6% and the market is expected to return 14%. A portfolio composed of 40% of AAB, and the rest in BBB. Based on the given information you are required to calculate: i. the expected rate of return of AAB. (3 Marks) ii. the expected rate of return of BBB. (3 Marks) iii. the portfolio beta. (3 Marks) iv. the portfolio expected rate of return. (3 Marks) b. "Beta is a measurement of the relationship between a security's returns and the general market's return." Do you agree with this statement? Discuss your answer by using your own words and example. (8 Marks) (Total: 20 Marks)