SECTION B: MEDIUM ANSWER QUESTIONS

TASK $3$

$12$ MARKS

Nqpbayerulu Pyt LAd is diversihing its operations and business growth strategy and hare decided to linvest in some shares listed in the Johamesburg Exchange. Below is the data avalable for $4$ shares from which the company can invest in$.$

$\backslash$table$[[$Share$,$Actual Return,Beca$],[$Jampak$,18\%,1\mathrm{.}3],[$Colder$,13\mathrm{.}28,0\mathrm{.}8],[$Moon Pak,$16\mathrm{.}5\%,1\mathrm{.}1],[$Zappa$,17\%,1\mathrm{.}7]]$

ThMequaree rgte is $10\%s$ and the expected return on the market portfolio is $15\%$ Kequired:

$3\mathrm{.}1.$ Calculate the expected return on each of the shares of the Shares and name the shares Nqabayezulu can invest in and those not suitable. Give reason for your answer. $(8)$

$3\mathrm{.}2$ Determine which of the above $4$ shares are undervalued and overvalued. $(4)$