1. The average beta of individual stocks in the market portfolio:
A. is one.
B. is zero.
C. is 1/2 (midway between one and zero).
D. cannot be calculated without knowing the stocks in the portfolio.
2. The company cost of capital:
A. measures what investors want from the company.
B. depends on current profits and cash flows.
C. is measured using security book values.
D. depends on historical profits and cash flows.