Question $2$

Aiman's portfolio is currently valued at RM$500,000.$ His portfolio comprises the following shares:

From the above information, you are required to answer the following questions.

a$.$ Compute the portfolio's beta factor. Clearly state the formula and show your workings.

$(4$ Marks$)$

b$.$ Based on your computation in part $($a$),$ given that the market risk$-$free rate is $3\%$ and

market risk premium is $8\%,$ calculate the required rate of return of Aiman's portfolio.

Clearly state the formula and show your workings.

c$.$ Given that the market risk$-$free rate is $3\%$ and market risk premium is $8\%,$ calculate the

expected rate of return for the overall market share. Clearly state the formula and show

your workings.

d$.$ Based on your calculation in part $($b$)$ and $($c$),$ interpret your findings.

Formula

Expected Return

$k^{*}=P_1{k}_1+P_2{k}_2$

$P_n{K}_n$

Standard Deviation:

The Coefficient of Variation $($CV$)$:

$CV=\frac{}{k^{-}}$

Portfolio Beta:

${}_p=w_1{b}_1+w_2{b}_2$

$.w_n{b}_n$

CAPM:

$k=k_f+(k_m-k_f)$

$k=k_{rf}+(R{P}_m)$