You have successfully completed your MBA and have decided to establish an investment portfolio using the additional income that you are now receiving. You bave collected the following data on GK Limited stocks and The Liberty Fixed Income Fund which are available through your local investment broker. a) Assume that you will invest 75% of your funds in GK stocks and 25% in the Liberty Fixed Income Fund (i) Compute the expected return on the portfolio (2 marks) (ii) The standard deviation of the portfolio (3 marks) b) You have become more risk averse and so you decide to collect more information on the market and review your portfolio. You have found that the Treasury Bill rate is 5%, the return on the market was 17% and GK stocks have a beta of 0.6 . (i) Compute the expected return and standard deviation on your portfolio if you decided to move your investments from GK stocks to the Treasury Bill. (3 marks) (ii) Using CAPM, is GK stocks fairly valued, undervalued or overvalued? c) Comment on why you would choose to invest in the portfolios above versus investing entirely in GK stocks, The Liberty Fixed Income Fund or the Treasury Bill