### Active Investor, Blooming, Bunnings and Lily Fashion House

Question 1 You are an active investor in the securities market and you have established an investment portfolio of two stock A and B five years ago. Required: If your portfolio has provided you with returns of 9.7%, -6.2%, 12.1%, 11.5% and 13.3% over the past five years, respectively. Calculate the geometric average return of the portfolio for this period? Assume that expected return of the stock A in your portfolio is 14.6%. The risk premium on the stocks of the same industry are 5.8%, the risk-free rate of return is 5.9% and the inflation rate was 2.7. Calculate beta of this stock using Capital Asset Pricing Model (CAPM)? Assume that you bought 200 stock B in your portfolio for total…

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