Question: please show the working process included formula. thank you Question 2 John Corporation has invested in the following stocks: 900 Stock L M N P

please show the working process included formula. thank you

Question 2 John Corporation has invested in the following stocks: 900 Stock L M N P No. of units purchased 700 950 800 Beta factor 0.9 1.5 0.8 Market value per unit $3.50 $4 $3.20 $4.10 The risk-free rate is 3% and the return on market is 15%. If the required rate of return is 16.5%, then you are required to assist John Corporation to: (a) Determine the portfolio's beta factor. (4.5 marks) (b) Calculate the expected rate of return by using CAPM method for each of the stocks individually (4 marks) Compute the portfolio's expected rate of return. (2.5 marks) Justify whether you have assisted John Corporation in investing a profitable portfolio. (2 marks) (d) (e) Describe THREE (3) benefits of diversification. (6 marks) Differentiate between systematic risk and unsystematic risk. (6 marks)

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