Question: Question 3 a. Project X is currently under consideration with a beta of 1.75. The risk free rate of return is 8% and the return

Question 3 a. Project X is currently under consideration with a beta of 1.75. The risk free rate of return is 8% and the return on the market is 12%. i. Calculate the required rate of return on Project X. (5 marks) ii. Calculate the required rate of return on Project X if the market rate increase by 2%? (2 marks) iii. Calculate the required rate of return of the Project if the market rate decline by 2%? (2 marks) iv. On the basis of your calculation in b above would you recommend this investment? (1 marks) (Total 10 marks) b. You invested $100,000.00 eight (8) years ago in a unit trust account. Using the information below, complete the table: Year Beginning Value Ending Value HPR HPY 1 100,000 108,000 2 108,000 1.06 3 124,783.20 0.09 4 128,526.70 1.03 5 0.98 6 0.12 7 141,070.91 1.07 8 0.04 5 (15 marks) c. Using the information in (b) above, calculate the Arithmetic and Geometric Means of the investment. (5 marks)

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