Question 2 Risk and Return a) Assuming the following returns and corresponding probabilities for asset A. Asset A Rate of Return Probability 109 30% 15 40 20 30 Calculate The standard deviation The coefficient of variation [4 [3] b) Akai has a portfolio of three assets. Assuming he invests 50 percent of its money in asset A with 10 percent rate of return, 30 percent in asset B with a rate of return of 20 percent and the rest in asset C with 30 percent rate of return Asset Rate of Return (r) Weight (W) W A 10% 0.50 5.00 B 20 0.30 6.00 C 30 0.20 6.00 17.00 rW What is the expected return for the portfolio? [4] 4 c) Nico owns 100 shares of stock X which has a price of R12 per share and 200 shares of stock Y which has a price of R3 per share What is the proportion of Nico's portfolio invested in stock X? [3] d) Given that the expected return on asset X is 20 percent, its beta is 1.5, and the risk free rate is 5 percent; What is the expected market return? [41