Question: QUESTION B3 (4+4+2 = 10 marks) Pacific Blue Limited has a beta of 0.8, the rate on Australian Treasury Bonds is 2.5% and the

QUESTION B3 (4+4+2 = 10 marks) Pacific Blue Limited has a beta

QUESTION B3 (4+4+2 = 10 marks) Pacific Blue Limited has a beta of 0.8, the rate on Australian Treasury Bonds is 2.5% and the expected return for the All Ordinaries Index is 6%. Required: a) Calculate the required return (i.e. Expected Return) for Pacific Blue Limited. H2C091 Business Finance b) What does it mean in terms of the market security line when 0 < beta < 1.00? c) What does a beta coefficient measure? Define beta. (4 marks) (4 marks) (2 marks)

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