1. Company B has a bond outstanding that pays a 8% coupon. The interest is paid semi-annually, and the bond matures in 10 years. The company Bs bond be selling at $980? What is its current yield? What is it capital gain or loss yield, if the bond can be sold at $990 in a year?

2. Assume that the risk-free rate is 3.8% (T-Bill), the return on the market portfolio (S&P 500) is 10.8%. Based on the historical data, A Inc. has a beta of 1.2 against the S&P 500 return last ten years, What is its required rate of return of A Inc.