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Question 7 (CLO 5, Marks 6): Let's assume, you are the equity analyst at Dubai Financial market. You are currently evaluating the portfolio risk of
Question 7 (CLO 5, Marks 6): Let's assume, you are the equity analyst at Dubai Financial market. You are currently evaluating the portfolio risk of the diversified investment. The current risk-free rate in the market is 1.95%. The Market returns of DFM are expected to be 6.23%. Suppose your assistant provided you the following information of the list of firms that are included in the client portfolio. Given the below Information what would be the portfolio risk premium? Show your working Firms Funds Average Average Beta (Risk) Weights Invested Returns AED 8,000 12.1 % 2.21 22.86% AED 11,000 13.19% 0.89 31.43% 25.01% AED 16,000 45.71% 1.10 B
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