You have been called upon to advise a client with regard to an investment of R100 000 in shares in the industrial sector of the JSE. You have gathered data and assigned probabilities to expected returns under four possible market conditions. The following probabilities have been assigned to two individual shares, and to a unit trust. The unit trust is widely diversified portfolio with a beta of 1 . You may assume that despite the small number of readings, the distributions all have the characteristics of a normal distribution. In addition, you may assume that borrowing and lending is possible at the risk-free rate of 10%. Required: (a) Find the expected return, standard deviation, and co-efficient of variation for each of Aruntex and Boumet. (10) (b) Find the correlation co-efficient for the returns from Aruntex and Boumet. (5) (c) Calculate the beta of Boumet. (5) (d) If your client borrowed R70 000 and invested R170 000 in a certificate of deposit Trust, calculate the expected return and the total risk of the investment. (5) (e) If your client invested R20 000 in Aruntex and R80 000 in Boumet, calculate the expected return and total risk of the portfolio. (5) You have been called upon to advise a client with regard to an investment of R100 000 in shares in the industrial sector of the JSE. You have gathered data and assigned probabilities to expected returns under four possible market conditions. The following probabilities have been assigned to two individual shares, and to a unit trust. The unit trust is widely diversified portfolio with a beta of 1 . You may assume that despite the small number of readings, the distributions all have the characteristics of a normal distribution. In addition, you may assume that borrowing and lending is possible at the risk-free rate of 10%. Required: (a) Find the expected return, standard deviation, and co-efficient of variation for each of Aruntex and Boumet. (10) (b) Find the correlation co-efficient for the returns from Aruntex and Boumet. (5) (c) Calculate the beta of Boumet. (5) (d) If your client borrowed R70 000 and invested R170 000 in a certificate of deposit Trust, calculate the expected return and the total risk of the investment. (5) (e) If your client invested R20 000 in Aruntex and R80 000 in Boumet, calculate the expected return and total risk of the portfolio