1. There are two stocks you are considering to buy. Stock A and Stock B. Stock A has a beta of 1.4 and Stock B has a beta of 3.6. Treasury bills have a return rate of 7% and the market portfolio has an expected return of 11%. Compared to the less risky stock, the riskier stock has
A) 8.4% higher return
B) 8.3% higher return
C) 8.8 higher return
D) 8.8% lower return
E) 8.3 Lower return
2. a stock currently sells for $23.00 and its required rate of return is 18%. The dividends are expected to increase at a constant rate of 9% per year. WHat is the expected price of the stock three years from today?
A) $35.15
B) $27.70
C) $24.43
D) $29.79
E) $33.07