Question: QUESTION 1 - RISK AND RETURN [23 marks] You are considering investing $150,000 to create a portfolio of two companyr stocks. The portfolio created will
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QUESTION 1 - RISK AND RETURN [23 marks] You are considering investing $150,000 to create a portfolio of two companyr stocks. The portfolio created will consist of 50% shares in Nature's Flour Mill Ltd and 40% shares in Fun Days Snacks Company Ltd. The price, beta and dividend data for the two companies for the last three [3} years, 201?, 2018 and 2010I are shown in Table 1 below. TABLE 1 Nature's Flour IMjll Ltd. Fun Days Snacks Company Ltd. (50%} {40%} STOCK PRICE STUCK PRICE ' ' Dividend Beta Beginning End of Beta Paid of Year Year ' -----m Answer the following guestion s: a] Calculate the expected return for each asset over the 3year period [10 MARKS}
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