1. Calculate the Expected Rate, Standard Deviation, Variance and Coefficient of variation and decide which of the follow

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1. Calculate the Expected Rate, Standard Deviation, Variance and
Coefficient of variation and decide which of the following company
is better for investment.
Possible outcomes
Probability
Rate of Return
Company G
Company H
Bullish Trend
0.25
20%
32%
Normal Trend
0.45
8%
5%
Bearish Trend
0.3
-6%
-6%
2. Consider a portfolio comprised of three securities in the
following proportions and with the indicated security beta.
Security
Amount Invested
Beta
Expected return
A
$1.5 million
1.3
12.5%
B
$1.0 million
-0.1
8%
C
$2.0 million
0.6
9.8%
a. What is the portfolio’s beta?
b. What is the portfolio’s expected return?