1. Mr K manages an RM35 million mutual fund that has a beta of 1.2 and an 11.50% required return. The risk-free rate is 4.20%. He now receive another RM17.5 million, which he will invest in stocks with an average beta of 0.72. What is the required rate of return on the new portfolio?
2. Currently, the risk-free rate is 4.25%, and the market risk premium is 8.00%. A fund manager has a RM300 million portfolio with a beta of 1.20. The manager expects to receive an additional RM200 million which will be invested in additional stocks. After investing the additional funds, the manager wants the fund's required and expected return to be 15.00%. What must the average beta of the new stocks be to achieve the target required rate of return?
3. George just borrowed $100,000 at an annual interest rate of 8% and he will repay it in five equal installments at the end of each of the next five years. How much would he still owe at the end of the first year, after the first payment has been made?
4. You plan to buy a car and need to borrow $50,000 from the bank. Interest rate offered by the bank is 4% nominal rate and the term loan is 7 years. Your installment will be monthly installment. How much total interest do you need to pay in Year 1?