Problem 1

Consider the following two potential investments Nexit and Rexit. You plan to invest 8,000 KD in investment Nexit and 12,000 KD in investment Rexit.

Date	Return Nexit	Return Rexit
2016	0.03	-0.04
2017	-0.05	0.08
2018	0.08	0.07
2019	0.12	0.13

a. Build a portfolio consisting of Nexit and Rexit based on the information above.

b. Calculate the average return of the portfolio.

c. Calculate the risk of the portfolio.