1. You are considering buying a stock with a beta of 3.10. If the risk-free rate of return is 6.0%, and the expected return for the market is 10.0%, what should the expected rate of return be for this stock?

2. You are holding a stock that has a beta of 2.63 and is currently in equilibrium. The required return on the stock is 39.40% and the return on a risk-free asset is 8.0%. What would be the return on the stock if the stock's beta increased to 3.66 while the risk-free rate and market return remained unchanged?