Question: i need a detailed, step by step answer for both problem 1 and 2.. pleaase SECTION (1) Problem Solving (60 marks] Problem 1 (12 marks)

i need a detailed, step by step answer for both problem 1 and 2.. pleaase

SECTION (1) Problem Solving (60 marks] Problem 1 (12 marks) Consider the following two potential investments Nexit and Rexit. You plan to invest 8,000 KD in investment Nexit and 12,000 KD in investment Rexit. Date Return Nexit Return Rexit 2016 0.03 -0.04 2017 -0.05 0.08 2018 0.08 0.07 2019 0.12 0.13 a. Build a portfolio consisting of Nexit and Rexit based on the information above. b. Calculate the average return of the portfolio. C. Calculate the risk of the portfolio. Problem 2 (12 marks) SAGE Enterprises just paid a dividend of $2 per share. The current market price is $50 per share. Dividends are expected to grow at a constant rate "g". The risk-free rate is equal to 3% and the share risk premium is equal to 5%. a. Calculate the growth rate of dividends "g". b. Estimate the price of the share 5 years from today

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