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The following table shows the possible states of the iron ore market for the coming year, and the returns South Iron Ltd and Broome Minerals Ltd can expect under the different iron ore price scenarios. (a) Calculate the expected return of South Iron Ltd, Broome Minerals Ltd and a portfolio with 40% of funds invested in South Iron Ltd and 60% invested in Broome Minerals Ltd. (6 marks) (b) Calculate the risk of both South Iron and Broome Minerals. If the correlation between South Iron and Broome Minerals is 0.3, calculate the risk of the portfolio mentioned in (a). (6 marks) (c) Interpret your calculations in (a) and (b) regarding the expectations for the portfolio, assuming a normal distribution. (2 marks) (d) Which investment would you choose, the portfolio or individually in either South Iron or Broome Minerals? Justify your answer. ( 2 marks) (Total marks: 6+6+2+2=16 Marks)