The importance for the finance management

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1. Ali invests 70% of his portfolio in Qibla Cola and 30% in Sahabah Shoes. The expected dollar return on Qibla Cola is 15% with a standard deviation of 23%, while for Sahabah shoes it’s 40% with a standard deviation 51%. By assuming beta of Qibla Cola is 0.9 and beta of Sahabah Shoes is 1.3, T-bills rate is 5% and the market premium risk is 7%, do the following:

Based on the above data, what is Sahabah Shoe's required rate of return?

a. 11.30%

b. 22.55%

c. 12.15%

d. 12.14%

2. Writes an essay about the capital and risk, the importance for the finance management and what you need to know and why you should know. In addition, what is its significance for managerial finance?

Reference no: EM132055713

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