Question 1 a) Discuss the concept of diversification in security portfolio. b) Seri Kitchen is a firm manufacturing kitchen cabinet. The company must choose between two asset purchases. The annual rate of return and related probabilities given below summarize the firm's analysis.

Asset A
Rate of return	Probability
10%	30%
15%	40%
20%	30%

Asset B
Rate of return	probability
5%	40%
15%	20%
25%	40%

For each asset, compute the expected rate of return. ii. For each asset, compute the standard deviation of the expected return. iii. For each asset, compute the coefficient of variation of the return. iv. Which asset should Seri Kitchen select?