1. Nob-Orrow Inc. is considering an investment in a project that is similar in risk to its existing projects. The firm makes no use of debt and is entirely financed by common stock with a beta of 1.4. The expected return on the market portfolio is 10 percent and the treasury bill rate is 4 percent. The required rate of return on this project is:
A. 14%
B. 6%
C. 12.4%
D. 10%
E. None of the above
2. Which of the following is not a financial intermediary?
A. New York Stock Exchange
B. Washington Savings and Loan
C. First National City Bank
D. Merchants Savings Bank