1. A stock has an expected return of 14 percent, its beta is 0.55, and the risk-free rate is 7 percent. What must the expected return on the market be?
20.71%
19.73%
18.74%
20.52%
12.73%
2. Given a zero-coupon rate on a 9-month bank deposit of 1.0% and a zero-coupon rate on a 1-year bank deposit of 1.25%, calculate the implied forward annualized rate between 9 months and 1 year?