Question $2$

Syurga Clothing Bhd is considering the launch of a designer clothing line. Presently, the company is in negotiations

with three renowned designer brands. They have conducted market research on each brand and have outlined the

expected returns for each as follows:

a Calculate the expected rate of return of these three designer brands

b$.$ Based on your answer in Part $($a$).$ If you have RM$50000,$ you place RM$15000$ in Lola, RM $12000$ in Hannie

and the remainder in Put Designer.

The Beta for each designer is as follow

i$.$ Calculate the expected rate of return of your portfolio

ii$.$ Calculate the portfolio beta

iii. If the market's required rate of return is $14\%$ and the risk$-$free rate is $6\%,$ what is the portfolio's

required rate of return?

iv$.$ Based on your answer in i and ii$,$ should you invest in this portfolio. Explain your answer.

$2$ Marks