1 - ABC Corporation's stock had an expected return of 11.75% last year, when the risk-free rate was 5.50% and the MARKET RISK PREMIUM was 4.75%. Then an increase in investor risk aversion caused the MARKET RISK PREMIUM to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is ABC stock's new expected rate of return? (Hint: First calculate beta, and then find the expected return.)

	14.38%
	14.74%
	15.11%
	15.49%
	15.87%

2 - One way to calculate a stock's beta is to calculate the stock's coefficient of variation. calculate both the stock's mean return and the std. dev. of the returns. regress the stock's past returns against the risk-free rate. regress the stock's past returns against past market returns. draw a trend line using past measures of the stock's beta.

a) calculate the stock's coefficient of variation.

b) calculate both the stock's mean return and the std. dev. of the returns.

c) regress the stock's past returns against the risk-free rate.

d) regress the stock's past returns against past market returns.

e) draw a trend line using past measures of the stock's beta.