1.You buy 50 shares of ABC stock at $30/share; stock currently pays $3/share in annual dividends. The price of the stock increases at 20%/year and dividends grow at 10%/year. If you participate in DRIP, how many ABC shares will you have at the end of the first year? Group of answer choices

54.583 58.90 56.34 52.09

None of the given answers is correct

2.

According to the Expectations Hypothesis, what is the expected rate of interest on a 1 year loan starting 2 years from now, implied by the following term structure: A 1-year zero coupon bond has a yield to maturity of 1%. A 2-year zero coupon bond has a yield to maturity of 3%. In addition, a 3-year zero coupon bond has a yield to maturity of 5%.

Group of answer choices

5.0%

8.0%

7.0%

None of the given answers is correct

6.0%