Your company can invest in either, or both of two investments: Hitam Berhad shares and Putih Berhad shares. The expected

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Your Company Can Invest In Either Or Both Of Two Investments Hitam Berhad Shares And Putih Berhad Shares The Expected 1 (43.34 KiB) Viewed 12 times

Your company can invest in either, or both of two investments: Hitam Berhad shares and Putih Berhad shares. The expected returns on each of these two investments vary depending on economic conditions. The following table shows the expected returns and the likelihood of the economic conditions. Economic conditions i) ➡) ii) Recession iv) v) vi) Normal Boom Probability 5% 65% 30% Hitam Berhad returns (%) the average return for Hitam Berhad shares the average return for Putih Berhad shares the weighted return of Hitam and Puth shares 12 the risk for Hitam Berhad shares the risk for Putih Berhad shares the weighted risk for Hitam and Putih shares 12 vii) the correlation between Hitam and Putih shares vii) the average return for portfolio. ix) the risk of the portfolio. 16 a) If you invest in a portfolio comprising both shares, it will be 60% in Hitam Berhad, and 40% in Putih Berhad, calculate Putih Berhad returns (%) (5) 18 28 BBF201/03 INTRODUCTION TO FINANCIAL MANAGEMENT Assignment 2 (20 marks)