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Question 2 Ark Investment is considering two securities, A and B with the following historic performance; Year Asset A Asset B 2005 14% -9% 2006
Question 2 Ark Investment is considering two securities, A and B with the following historic performance; Year Asset A Asset B 2005 14% -9% 2006 14% 18% 2007 16% -6% 2008 17% 25% 2009 17% 12% 2010 19% 10% (a) Calculate the average returns of both securities over the six years and comment on the results. (4) (b) Through the visualization of the returns of both securities, which one is more risker and why? (4) (c) Discuss any benefits of diversification if you were to combine the two securities in a portfolio. (2) (d) If you had invested M100,000.00 in security A in 2010 and your capital gain was 15%, how much would the dollar return be
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