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 (15 marks)

c. Using the information in (b) above, calculate the Arithmetic and Geometric Means of the investment (5marks)