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Calculate the expected portfolio returnnbspcalculate the


Abba investments wants to invest in securities C and D of firms in two different industries. The following information relates to the two securities.

C D

Expected return 14% 12%

Standard deviations 5 3

Beta 1.70 1.20

Amount of money invested Shs 720,000 Shs 480,000

REQUIRED:

  1. Calculate the expected portfolio return.
  2. Calculate the beta of the portfolio.
  3. Explain what happens to the portfolio risk if the returns of the two securities are:
  • Perfectly positively correlated.
  • Perfectly negatively correlated.

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Business Management: Calculate the expected portfolio returnnbspcalculate the
Reference No:- TGS01113943

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