Genting Berhad is a Malaysian conglomerate with holdings in plantations and tourist resorts. The beta estimated for the firm, relative to the Malaysian stock exchange, is 1.15% and the long term local currency risk-free rate in Malaysia is 11.5%.

a. Estimate the expected rate of return on the stock in the local currency.

b. If you were an international investor, what concerns (if any) would you have about using the beta estimated relative to the Malaysian index? If you do, how would you modify the beta?