QUESTION 1 (20 Marks)

1. You are considering to acquire shares of common stock in the Glenmarie Properties Group Berhad.

Glenmarie Properties Group Berhad

Possible Rate of Return	Probability
-0.15 0.05 0.15 0.25	0.30 0.10 0.30 0.30

Compute the expected return [E(Ri)] on your investment in Glenmarie Properties Group Berhad.

[10 marks]

2. A stockbroker calls you and suggests that you invest in the Hospital Equipment Company. After analyzing the firms annual report and other material, you believe that the distribution of expected rates of return is as follows:

Hospital Equipment Company

Possible Rate of Return	Probability
-0.50 -0.20 -0.10 0.20 0.30 0.70	0.05 0.20 0.10 0.30 0.20 0.15

Compute the expected return [E(Ri)] on Hospital Equipment Company stock.