You want to start saving for your first car which costs R300 000. You decide to save by investing in an equity index for 5years. You know that you will receive R25000 from your graduate program next year so you decide that you will invest R2500 a month into the index for 5 years. If the equity index has a beta of 0.9, the current annual treasury bill rate is 4.15% and the JSE(ALSI) earns 9.4% annually, will you be able to afford your car at the end of your investment period?

You want to start saving for your first car which costs R300 000. You decide to save by investing in an equity index for 5years. You know that you will receive R25000 from your graduate program next year so you decide that you will invest R2500 a month into the index for 5 years. If the equity index has a beta of 0.9, the current annual treasury bill rate is 4.15% and the JSE(ALSI) earns 9.4% annually, will you be able to afford your car at the end of your investment period?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 6P

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