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Assume your company made RM2 million investments in a local Malaysian- based fruits company in Malaysia and your main business customers are from overseas. You
Assume your company made RM2 million investments in a local Malaysian- based fruits company in Malaysia and your main business customers are from
overseas. You are required to explain the sources of risk that you identify with this investment? Due to covid-19 pandemic and other constraints, you cannot export your fruits to overseas. You are required to show the movement of risk in the security market line (SML) graph by assuming your companys beta is 1.2, market return of 13% and risk free rate of return of 2.2%.
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