1) You can get to know what career suits you the most
2) Know about the relevant options you can go for
3) Know what career suits your qualifications
4) Benefits and pros and cons
Answer: a. 11.5%
Explanation:
Fad followers are those investors who follow a trend when it emerges and as such their betas will be less than that of informed traders because the informed traders would have acted first.
Using the Capital Asset Pricing Model to calculate expected return.
Er = Rf + b( Rm - Rf)
Er = Expected return
Rf = Risk Free Rate
b = Beta
Rm = Market Return.
The Expected Return for the Informed Investors is,
= 4% + 1.4 ( 10% - 4%)
= 4% + 1.4 ( 6%)
= 12.4%
With the Fad followed expected to have a lower beta and therefore a lower expected return than the Informed Investors, the only suitable option is the 11.5%.
The answer is a, the more you wait to get you money back the more you charge in interest, you have to be paid to wait.
I think the answer is b. Sorry if it isn't it is just a guess.