TIME: 3 HOURS INSTRUCTIONS: There are FIVE (5) questions in this question paper. Answer ALL QUESTIONS in the answer booklet. (100 MARKS) (30 MARKS) QUESTION 1 a. Jaya Holding has prepared the following information regarding two investments under consideration. Common Stock B Common Stock A Probability Return Return Probability 0.30 11% - 3% 0.20 0.40 15% 0.30 6% 0.30 19% 0.30 14% 0.20 22% Required: i. Calculate the investment's expected rate of return for each stock. (8 marks) (CLO2:PLO2:C3) ii. Calculate standard deviation for each stock. (8 marks) (CLO2:PLO2:C3) iii. Calculate coefficient of variation for both investments. (8 marks) (CLO2:PLO2:03) iv. Based on your answer which investment should be accepted? Explain. (3 marks) (CLO2:PLO2:C3) Bintang Corporation common stock which has a beta of 2.3. The expected market rate of return is 12.5 percent and the risk free rate is 5 percent. What is the appropriate expected rate of return for Global Corporation? Assume that the CAPM applies. (3 marks) (CLO2:PLO2:03)