Suppose that you take out a federal direct loan on September 1 before your senior year for $7500 (the maximum allowed for a dependent student) and plan to begin paying it back on December 1 after graduation (so you will have had the loan for 15 months, including the six-month grace period after leaving school). The interest rate is 4.29% and you pay the interest every quarter until that December 1. On that December 1 you will owe $__Answer 1__, and $__Answer 2__ of that will be interest? Answer 1: Answer 2:
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Suppose that you take out a federal direct loan on September 1 before your senior year for $7500 (the maximum allowed for a dependent student) and plan to begin paying it back on December 1 after graduation (so you will have had the loan for 15 months, including the six-month grace period after leaving school). The interest rate is 4.29% and you pay the interest every quarter until that December 1. On that December 1 you will owe $__Answer 1__, and $__Answer 2__ of that will be interest?
Answer 1:
Answer 2:
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