Question: (a) The table below includes information ABC Ltd, X Ltd and a portfolio of ABC and X. Calculate the missing figures (labelled A, B, C,

(a) The table below includes information ABC Ltd, X Ltd and a portfolio of ABC and X. Calculate the missing figures (labelled A, B, C, D and E) in the table below.

(b) Explain the benefit of investing in the portfolio in (a), rather than one of the individual companies.

(c) Write a brief interpretation of the beta for ABC and the beta for X.

Month ABC X Portfolio
Jan-20 1.4% 1.0% 1.1%
Feb-20 1.7% 5.0% 4.0%
March-20 -52.7% 40.0% C
April-20 37.6% 1.0% 12.0%
May-20 20.41% -3% 4.0%
Average Return A 8.8% 6.7%
Standard Deviation B 17.7% D
Portfolio weight 30.0% 70.0% 100.0%
Beta 1.1 -0.4 E

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