Question 3 (14 marks) 3.1. Joel wants to invest R100 in asset A with an expected rate of return of 11% and a standard deviation of 0.21 (risk free) and in Asset B with a rate of return of 4.5% and standard deviation of 0.25. He wants to have R114 in return, Jeremy an analyst from Glen Investment has advised Joel that he needs to invest 60% in risky asset and 40% in risk free to achieve his desired outcome. Do you agree with Jeremy? If not what are the appropriate weights. (5) 3.2. Calculate the standard deviation of the portfolio if Joel decides to invest 55% in Asset A and 45% in asset B and the correlation between the stocks is 0.04. (5) 3.3. Dr. Dan is considering investment in a project with beta coefficient of 1.75. What would you recommend him to do if this investment has an 11.5 percent rate of return, risk- free rate is 5.5 percent, and the rate of return on the market portfolio of assets is 8.5 percent? (4) Question 3 (14 marks) 3.1. Joel wants to invest R100 in asset A with an expected rate of return of 11% and a standard deviation of 0.21 (risk free) and in Asset B with a rate of return of 4.5% and standard deviation of 0.25. He wants to have R114 in return, Jeremy an analyst from Glen Investment has advised Joel that he needs to invest 60% in risky asset and 40% in risk free to achieve his desired outcome. Do you agree with Jeremy? If not what are the appropriate weights. (5) 3.2. Calculate the standard deviation of the portfolio if Joel decides to invest 55% in Asset A and 45% in asset B and the correlation between the stocks is 0.04. (5) 3.3. Dr. Dan is considering investment in a project with beta coefficient of 1.75. What would you recommend him to do if this investment has an 11.5 percent rate of return, risk- free rate is 5.5 percent, and the rate of return on the market portfolio of assets is 8.5 percent? (4)