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The correlation between securities T and V is 0.72. (a) Complete Table 3 below for portfolios using the information given in the question. Table 3: Portfolio Information to Complete P Description WT Wy Portfolio Portfolio Beta Return ER(P) risk op 1 80% in T and 20% in V 0.80 0.20 2 Portfolio beta is 1.02 1.02 3 Target ER(P) = 8% 8.00 4 0 30% in T and 70% in risk 0.30 free security Here P is the portfolio number. Wy and wy are the weights in security T and V respectively. [20 marks] (b) During a market crash, which of the two stocks would it be best to hold? Use information in the question and your own wider knowledge of investment decisions [5 marks] The correlation between securities T and V is 0.72. (a) Complete Table 3 below for portfolios using the information given in the question. Table 3: Portfolio Information to Complete P Description WT Wy Portfolio Portfolio Beta Return ER(P) risk op 1 80% in T and 20% in V 0.80 0.20 2 Portfolio beta is 1.02 1.02 3 Target ER(P) = 8% 8.00 4 0 30% in T and 70% in risk 0.30 free security Here P is the portfolio number. Wy and wy are the weights in security T and V respectively. [20 marks] (b) During a market crash, which of the two stocks would it be best to hold? Use information in the question and your own wider knowledge of investment decisions [5 marks] The correlation between securities T and V is 0.72. (a) Complete Table 3 below for portfolios using the information given in the question. Table 3: Portfolio Information to Complete P Description WT Wy Portfolio Portfolio Beta Return ER(P) risk op 1 80% in T and 20% in V 0.80 0.20 2 Portfolio beta is 1.02 1.02 3 Target ER(P) = 8% 8.00 4 0 30% in T and 70% in risk 0.30 free security Here P is the portfolio number. Wy and wy are the weights in security T and V respectively. [20 marks] (b) During a market crash, which of the two stocks would it be best to hold? Use information in the question and your own wider knowledge of investment decisions [5 marks] The correlation between securities T and V is 0.72. (a) Complete Table 3 below for portfolios using the information given in the question. Table 3: Portfolio Information to Complete P Description WT Wy Portfolio Portfolio Beta Return ER(P) risk op 1 80% in T and 20% in V 0.80 0.20 2 Portfolio beta is 1.02 1.02 3 Target ER(P) = 8% 8.00 4 0 30% in T and 70% in risk 0.30 free security Here P is the portfolio number. Wy and wy are the weights in security T and V respectively. [20 marks] (b) During a market crash, which of the two stocks would it be best to hold? Use information in the question and your own wider knowledge of investment decisions [5 marks]

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