Question 1 (a) Puan Dedaun holds a portfolio with the following securities: Security Amount invested...
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Question 1 (a) Puan Dedaun holds a portfolio with the following securities: Security Amount invested (RM) Expected rate of return (k^) Daun Kuchai Berhad Daun Kunyit Berhad Daun Kelapa Berhad 2,000 5,000 3,000 16% 12.8% 9.6% Based on the above information, compute the expected rate of return for the portfolio. (5 Marks) Question 1 (b) i. Assume that you have RM165,000 invested in a stock whose beta is 1.25, RM85,000 invested in a stock whose beta is 2.35 and RM235,000 invested in a stock whose beta is 1.11. Determine what is the beta of this portfolio. (3 Marks) ii. Based on your answer in part (i), compute the required rate of return for this portfolio, given that the market rate of return is 13% and risk-free rate is 5%. (2 Marks)
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