Question: QUESTION 4 The statistics below show standard deviation, correlation with the market and weights for a portfolio consisting of four securities. SD ( s i

QUESTION 4

The statistics below show standard deviation, correlation with the market and weights for a portfolio consisting of four securities.

SD (si) Correlation (ri,M) Weight
Xero Ltd 20% 0.75 23%
Afterpay Ltd 17% 0.60 37%
REA Group Ltd 14% 0.52 16%
CSK Ltd 16% 0.68 24%
Market 13%
Risk Free Rate 1.8%
Market Return 8.5%

REQUIRED

  1. Calculate the expected returns for each company.

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