Question: 2. Risk and return estimates (4 marks): a. Use CAPM to estimate the expected return for the shares of: i) your case company; and ii}


2. Risk and return estimates (4 marks): a. Use CAPM to estimate the expected return for the shares of: i) your case company; and ii} a hypothetical company with a negative beta of -D.2D as at 5 April, 2019. To do this, use the yield to maturity on that date of a 10-year Australian Government bond as a proxy for the risk- free rate, assume the market risk premium is 6% and use the company's most recent 5 year beta. b. Using the data from part 2a, estimate portfolio expected return and beta, assuming a portfolio made up of your case company and the hypothetical company in equal weighting. 3. Risk and return analysis (15 marks): a. Drawing on expectations from theory and incorporating the overall context of your chosen company, discuss and interpret the risk and return measures from parts 2a and 2b. You may include additional measures. If so, clearly source the data and ensure you clearly explain your calculations
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