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QUESTION 1 ( 1 5 MARKS ) As a new analyst, you have calculated the following annual rates of return for the stocks of both
QUESTION MARKS
As a new analyst, you have calculated the following annual rates of return for the stocks of both
Land & General Berhad L&G and Kemayan Company Berhad Kemayan
Required:
a Your manager suggests that because these companies produce similar products, you should
continue your analysis by computing their Covariance. Show all calculations.
marks
b Calculate the Coefficient of Correlation using the data provided in part a above. Show all
calculations.
marks
c Discuss if the combination of L&G common stock and Kemayan common stock would be
beneficial for diversification.
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