**QUESTION ONE**

- Goal traders have invested in two securities traded at the Nairobi Stock Exchange (NSE). The security X Possible returns are estimated as 11%, 10%, 8%, 7%, 5%, 4%, 3%, 2%, 0% and 0%, for the periods one to ten. Those of Security Y are estimated as 15%, 13%, 12%, 11%, 9%, 6%, 5%, 4%, 3%, and 2%, for periods one to ten.

Each possible return has an equal chance of being realized.

**Required**

If Goal trader’s portfolio formation is Ksh 50,000, committing equal amounts in each asset, determine the Portfolio risk

- Supposing X and Y’s possible returns changed as follows:

X=11%, 10%, 8%, 7%, 5%, 4%, 3%, 2%, 0% and 0% for periods one to ten.

Y=2%,3%,4%,5%,6%,9%,11%,12,%13%,15%, for periods one to ten, and each possible return has an equal chance in both cases. Other details remain the same.

**Required**

Determine the portfolio Risk