MAC4865 Assignment 3 (244647)(COMPLETE ANSWERS) - DUE 16 JULY 2026

MAC4865
Assignment 3
(244647)

DUE : 16 JULY 2026

, ASSIGNMENT 03: COMPULSORY FOR YEAR MARK CONTRIBUTION

Due date: 16 July 2026 at 23:00

Unique Number: 244647


QUESTION 1 (25 marks)

1.1 Matching (4 marks)

Question Risk Answer

1.1.1 Currency risk B

1.1.2 Economic risk C

1.1.3 Transaction risk A

1.1.4 Translation risk D
1.2 D (2) A$/GBP 2.80
Calculation (IRP): F₀ = S₀ × (1+r_UK)/(1+r_A) = 2.85 × (1.03/1.05) = A$/GBP 2.80

1.3 A (2) R1,902 million
VaR (97.5% one-tail, z = 1.96) = Mean − (z × std dev) = 2,000 − (1.96 × 50) = R1,902 million

1.4 D (3) R15,000,120 and R15,599,880
Mean ZAR = 900,000 × 17.00 = R15,300,000
Std dev = 1% × 15,300,000 = R153,000
95% CI = 15,300,000 ± (1.96 × 153,000) = R15,000,120 to R15,599,880

1.5 C (3) R1,230 million

Year CF (Rm) DF @14% PV

1 104 0.877 91

2 113 0.769 87

3 123 0.675 83

TV 123×1.05/(0.14−0.05)=1,435 0.675 969
Total = 91+87+83+969 = R1,230 million

1.6 B (3) R202.8 million

• Industry expected earnings = 13% × R11m = R1.43m
• Excess (pre-tax) return = R32m − R1.43m = R30.57m
• After-tax excess return = R30.57m × 0.73 = R22.316m