SIMULATION QUESTION You as a Portfolio Manager of Carepls Berhad are part of the investment teams to cover equity investment in Malaysia. You also responsible for conducting research, evaluating investment ideas that meet the company's investment criteria and monitoring investment and portfolio performance. Your task today is to do a Portfolio Selection by using Simple Sharp Portfolio Optimization Model. As you know, Portfolio Selection is one of the steps in Portfolio Management Process. At the end of the discussion, you need to select the best Portfolio either Portfolio A or Portfolio B that might meet the company's investment objectives to achieve 25% portfolio return per year. Given below are the information for six (6) stocks for Portfolio A and Portfolio B. Stocks Notion Prlexus Dpharma Ypsah Greatec Pohkong PORTFOLIO A Beginning Value Ending Value Beta (RM) (RM) (B) 0.63 0.75 1.7 0.82 0.90 0.7 1.41 1.80 1.9 1.50 1.98 2.50 2.95 1.2 0.48 0.61 1.8 Market variance = 16% T-bills = 3% Residual Variance (ole) 10.33 8.62 22.19 28.12 18.15 23.23 20 Stocks Beginning Value (RM) 0.20 PORTFOLIO B Ending Value (RM) 0.24 Beta (B) 1.4 Residual Variance (ale) 11.5 Kanger Smtrack 0.59 0.70 7.20 0.35 0.43 0.8 1.6 1.8 15.3 16.7 0.65 0.86 Cypark Jcy Inari Iconic 1.70 0.70 16.9 19.4 2.28 1.7 0.95 20 Market variance (am) - 16% T-bills = 3% FIN377_SIMULATION Based on the information above, you have to compute the 1) Rate of return for each stock for Portfolio A and Portfolio B #) Excess return-to-beta ratio for Portfolio A and Portfolio B ) C-value and identify which stocks should be include in portfolio A and portfolio B. iv) Amount to be invest in each selected security in Portfolio A and Portfolio B if the total amount of fund is RM10 million v) Portfolio return by using Markowitz model for Portfolio A and Portfolio 3 (weightage refer to no. iv), vi) If the company put an investment objective of 25% portfolio return per year, which portfolio will you choose