problem 1:

Discuss and describe the significance of diversification in context of stock markets using appropriate numerical illustrations.

problem 2:

Mimine and Minush are two companies with the following dividend and market price per share (MP) for period 2000-2005

i. Compute the average return and risk for the above shares. Demonstrate clearly your calculation. Interprete your results. 

ii. Compute the portfolio return if an investor decides to make a portfolio with equal weight.                         

iii. If the correlation coefficient is -0.5 compute the portfolio risk. Comment on your answer.

problem 3:

Make a distinction between systematic and unsystematic risk.