A stock has an expected return of 13 percent, the risk-free rate is 5 percent, and the market risk premium is 7 percent. What must the beta coefficient of this stock be?

a.0.875

b.1.1428

c.1.857

d.1.6

Knowing that the nominal interest rate for a bank deposit of one year is 12% per year and the expected annual inflation rate is 6%, compute the real interest rate earned on the account at the end of the year.

a.5.66%

b.-5.35%

c.2%

d.0.5%

Indiana Jones, Inc. has sales of $27,500, costs of $13,280, depreciation expense of $2,300, and interest expense of $1,100. If the tax rate is 35 percent, what is the operating cash flow, or OCF?

a.$7,033

b.$11,433

c.$8,033

d.$10,433