As a financial management consultant, you have been presented with the following information about the returns for the securities of ZZ
January 5th, 2018
As a financial management consultant, you have been presented with the following information about the returns for the securities of ZZ plc and the returns for the market:Year Return of ZZ plc(%) Return of the market (%)1 18 102 21 113 20 84 25 125 26 14Additional information: Rate of return on Treasury bill is 8%The correlation coefficient between the security and the market is +0.83.Required:a)Calculate the required rate of return on ZZ plc’s shares using the Capital AssetPricing Model (CAPM)b) List six limitations of portfolio theory as an aid to investment decisions.