1. Fingroup financial institution issued an open-end fund with net asset value of $15.70 per share. It is sold with front-end load of 7.5%. What is the Offer price? (2 marks) 2. The data of two companies are given below: The T Bill is 4% and the market risk premium is 9%. (3 marks) Company $10 Dollar Store $20 Everything Store Forecast return 17% 16% SD 22% 25% Beta 1.3 1.0 a) Calculate Return for both the companies using Capital Asset Pricing Model. b) Characterize each of these two companies as underpriced, overpriced or properly priced. 3. The market price of a security is $50. Its expected rate of return is 10%. The risk free rate is 3.5%, and the market risk premium is 8.2%. What will the market price of the security be if Beta doubles and all other variables remains unchanged? Assume the stock is expected to pay a constant dividend in perpetuity. (4 marks) 4. SABB financial institution composition is as follows: Stock Shares Price $ Value held A 250,000 40 B 310,000 45 450,000 15 D 510,000 20 The fund has not borrowed any funds, but its accrued management fee with the portfolio manager currently totals $75,000. There are 2.8 million share outstanding. What is the NAV of the fund? (3.5 marks) 5. From the stock fund given below Calculate mean return and variance for the stock fund by using a suitable table format. (7.5 marks) Scenario Probability Rate of Return Boom 0.4 38 Growth 0.3 Recession 0.3 -19 21