Question: Expected Return (%) Portfolio 1 (%) Portfolio 2 (%) Cash 3 5 20 Fixed Interest (Bonds) 5 10 30 Property 6 15 20 Shares 11

Expected Return (%)

Portfolio 1 (%)

Portfolio 2 (%)

Cash

Fixed Interest (Bonds)

Property

(a) Using the expected returns and the portfolio weights reported in the table, calculate the expected returns for Portfolio 1 and Portfolio 2.

(b) Which portfolio is probably more suitable for a short term investment horizon? How about a long term investment horizon? Briefly explain your answer

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