Riccardo Davis takes out a discount loan because he needs R5 695,00 to buy a machine for his business Find the amount he needs to borrow (face value) if he plans to repay the loan in six months' time and the bank charges a 9,5% discount rate A. RS 979,00 n. RS 065,51 C. R5424,49 D. S 970,92

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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.