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Question 1 Ahmad Asmawee a chartered financial analysts in Singapore, is wanting to invest in a security listed on Kuala Lumpur Stock Exchange (KLSE).

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Question 1 Ahmad Asmawee a chartered financial analysts in Singapore, is wanting to invest in a security listed on Kuala Lumpur Stock Exchange (KLSE). He collects information on two different companies, Syazana Bhd and Norul Bhd from the KLSE. Syazana Bhd Norul Bhd Economic State Probability Return (%) Probability Return (%) Recession 0.30 -4 0.20 8% Normal 0.40 9 0.50 12% Boom 0.30 16 0.30 18% Given the probability distribution for the Malaysian economic state, you are required to calculate: a. The expected rate of return of each stock. b. the standard deviation of each stock (8 Marks) (8 Marks) (6 Marks) c. the coefficient of variation of each stock d. based on your answer in part (a) to (c) advised Ahmad Asmawee on company he should invest in. (3 Marks)

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