Soalan 2 / Question 2 (20 markah / marks)

A) Assume the expected return on portfolio M is 13%, with a standard deviation of 20%, and the risk free rate is 5%. Calculate the risk premium for Portfolio M. (5 markah / marks)

B) Assume that the beta for IBM is 1.15, the risk free is 5% and the expected return on the market is 12%. Calculate the required return for IBM.

C) Markowitzs approach to portfolio selection is that an investor should evaluate portfolios on the basis of their risk and expected return. Explain the concept of an efficient frontier derived by Markowitz.

D)

Assume that the two assets have the following statistics:

	Asset 1	Asset 2
Pulangan /Return (%)	10.1	15.4
Sisihan Piawaian / Standard Deviation (%)	16.8	27.5
Agihan / Weight	0.50	0.50
Pekali korelasi /Correlation coefficient	0.29

Calculate the standard deviation under each of these scenarios:

If r_1,2 = + 1.0

If r_1,2 = + 0.5

If r_1,2 = + 0.29

/ If r_1,2 = 0.00

PLEASE ANSWER THIS AS SOON AS POSSIBLE . THANK YOU

Jika / If r_1,2 = - 0.5

Jika / If r_1,2 = - 1.0