Please solve b (ii)Advise on the changes to be made if you would like to rebalance your portfolioaccording to the following weightings:SecurityABWeighting302020D15E15(i11)Assume that the capital market line is as follows:4,00 + 13,58Comment on whether each of the securities is overvalued or undervalued if returns ofthe securities are as follows:SecurityReturn20AB20C50DE2531 (b)A portfolio consists of securities as follows:Average buying Current marketprice (RM)4.008.001.20SecurityBetaUnits1.31.2price (RM)4.809.6030,00010,00080,000200,000150,000A1.33.200.500.20D1.50.30E1.60.10Required:Calculate the profit/loss (in RM) for the portfolio above.

Profit or loss is calculated by this formula. Profit/(loss) on security = (Current market price -…

(b) A portfolio consists of securities as follows: Average buying Current market price (RM) 4.00 8.00 1.20 Security Beta Units price (RM) 4.80 9.60 30,000 1.3 1.2 A B 10,000 80,000 200,000 150,000 3.20 0.30 1.3 1.5 0.50 E 1.6 0.20 0.10 Required: Calculate the profit/loss (in RM) for the portfolio above.

(b) A portfolio consists of securities as follows: Average buying Current market price (RM) 4.00 8.00 1.20 Security Beta Units price (RM) 4.80 9.60 30,000 1.3 1.2 A B 10,000 80,000 200,000 150,000 3.20 0.30 1.3 1.5 0.50 E 1.6 0.20 0.10 Required: Calculate the profit/loss (in RM) for the portfolio above.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 13QTD

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