1. The rate of return on the U.S. government treasury bill is 0.04 and the expected rate of return on the Wilshire 5000 is 0.06 . What is the required rate of return for a stock with a Beta 1.17?
2. How would you define operating risk and financial risk for enterprises? What resources would you access to obtain discussions and analyses of firm risk for publicly-traded firms?
3. Emmons Corporation has a 0.1 probability of a return of 0.31, a 0.1 probability of a rate of return of 0.06, and the remaining probability of a -0.1 rate of return. What is the variance in the expected rate of return of Emmons Corporation?