Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 1 (a) Puan Dedaun holds a portfolio with the following securities: Security Amount invested (RM) Expected rate of return (k^) Daun Kuchai Berhad Daun

image text in transcribed
Question 1 (a) Puan Dedaun holds a portfolio with the following securities: Security Amount invested (RM) Expected rate of return (k^) Daun Kuchai Berhad Daun Kunyit Berhad Daun Kelapa Berhad 2,000 5,000 3,000 16% 12.8% 9.6% Based on the above information, compute the expected rate of return for the portfolio. (5 Marks) Question 1 (b) i. Assume that you have RM165,000 invested in a stock whose beta is 1.25, RM85,000 invested in a stock whose beta is 2.35 and RM235,000 invested in a stock whose beta is 1.11. Determine what is the beta of this portfolio. (3 Marks) ii. Based on your answer in part (i), compute the required rate of return for this portfolio, given that the market rate of return is 13% and risk-free rate is 5%. (2 Marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management And Cost Accounting

Authors: Colin Drury

9th Edition

1408093936, 978-1408093931

More Books

Students also viewed these Accounting questions