Neco 2021 Commerce Question 27

An investor buys 200 shares of Company A at \(\text{₦}150\) each and 150 shares of Company B at \(\text{₦}240\) each. After one year, Company A pays a dividend of \(\text{₦}12\) per share and its price rises to \(\text{₦}165\). Company B pays no dividend and its price falls to \(\text{₦}210\). The market index rose by 8\% over the year.\n\n(a) Calculate the portfolio's overall rate of return (to two decimal places).\n(b) Assuming the market's standard deviation is 12\% and the portfolio's standard deviation is 15\% with a correlation of 0.8 between the portfolio and the market, compute the portfolio's beta using \(\beta = \frac{\rho\,\sigma_{p}}{\sigma_{m}}\).\nProvide the return (as a percentage) and the beta value.