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1. Stock A has a risk premium of 6.5 percent. If Treasury bills yield 6.2 percent and the expected return on the market is 10.5

1. Stock A has a risk premium of 6.5 percent. If Treasury bills yield 6.2 percent and the expected return on the market is 10.5 percent, what is the stock's beta coefficient?

2. . Two stocks, A and B, have beta coefficients of 0.8 and 1.4, respectively.

If the expected return on the market is 10 percent and the risk-free rate is

5 percent, what is the risk premium associated with each stock?

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