Subject is Investment Managemnt

QUESTION FOUR 4.1 Two years ago, ZANA Company issued a bond at a par value of R1 000 with a maturity time of 14 years. The bond makes semi-annual payments and is currently trading at R1 076.22. The current market interest rate for similar bonds is 8% per annum. Calculate the annual coupon rate of ZANA bond and explain whether the bond is currently trading at discount or premium. (10) 4.2 Using the following information in table 4.1 for Zama's portfolios, answer question 4.2.1 and 4.2.2 Zama invested R2 000 000 in a portfolio with the following characteristics: Beta Table 4.1 Description of share/bond Retail Industrial Resources Risk-free asset Investment (R) R400 000 R500 000 R686 000 R414 000 0.8 1.5 1.8 0 The return on the market is 17% and the risk free rate is 8%. ( 4.2.1 Calculate the Beta for Zama's portfolio. 4.2.2 Calculate the expected return on Zama's portfolio