Question 2 (20 marks) per share AAA Funds Bhd is currently holding the following portfolio which consists of stocks listed on Bursa Malaysia. Stock No.of shares Market price Beta Dividend Expected yield (%) return (%) (RM) Alpha 1,000,000 2.50 1.10 4.2 18 Bravo 1,500,000 4.25 1.50 3.5 22 Charlie 1,300,000 3.50 0.80 4.8 20 Delta 700,000 3.75 1.30 5.6 16 Echo 800,000 4.50 0.90 6.2 14 The present market return is 16% and the risk-free rate is 6%. Assume the CAPM holds: a) Evaluate whether AAA funds' portfolio is more or less risky than the market portfolio. (10 marks) b) Evaluate the performance of each of the stocks and advise the firm on how it should change the composition of its portfolio Explain the changes that you have recommended. (10 marks)