Question: Explain the difference between systematic risk and unsystematic risk with that aid of the graph. II) Musonda currently has a portfolio of shares giving a

Explain the difference between systematic risk and unsystematic risk with that aid of the graph. II) Musonda currently has a portfolio of shares giving a return of 22% with a risk of 14%. He is considering a new investment which gives a return of 23% with a risk of 15%. The coefficient of correlation of the new investment with his existing portfolio is +0.2. The new investment will comprise 45% of his enlarged portfolio. Calculate the portfolio risk and expected return if Musonda goes ahead with the new investment?

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