References Mailings Review View Help NZWANA PHELOKAZINOMANTO Table Design A Aa- Po A-e A- Layout 21 AaBbc De AaBbCD AaBb AaBbcc 1 Normal * No Spac... Heading1 Heading 2 Paragraph Find - Replace Select Editing Dictate Styles Voice Question 1 2020 Revision questions 1. il HII. What distinguishes uncertainty from risk? (3 marks) Differentiate between the state preference and the expected utility hypotheses approached to explaining uncertainty and risk (5marks) Suppose you have a risky asset that provides you with an expected return of 10% a year with 15% volatility (standard deviation). You also have a risk-free asset that provides you with a 4% risk-free return a. If you have Rim and invest 60% into the risky asset and 40% into the risk- free asset, what is the expected return and risk of your portfolio? (7 marks) b. How much would your portfolio be worth if they realized return on the risky asset is 15%? (5 marks) C. If you are allowed to borrow money at the risk-free rate, how can you get a portfolio with 20% expected retum and what is the risk of this portfolio? (5 marks) Question 2 1 W. How do the mean and variance help to understand risk? (5 marks) A market portfolio is made up entirely if the following securities