Q2. J. Miti has a portfolio worth K9 000. He then inherits shares of Alick Ltd worth K1 000. He seeks your guidance regarding whether he should keep his inheritance.

	Expected Returns	Standard Deviation	Correlation of original portfolio and Alick Ltd
Original Portfolio	0.67%	2.37%	0.4
Alick Ltd	1.25%	2.95%

A. Adding his inheritance to his original portfolio, calculate his new portfolios expected return. [4 Marks]

B. Calculate the new portfolios standard deviation. [6 Marks]

C. Calculate the Coefficient of Variation [CV] of the new portfolio. [4 Marks]

D. Should Mr. Miti keep the newly acquired Alick Ltd shares? Justify your reason using your vast investment analysis expertise. [6 Marks]