Assume the returns of XYZ and the market for the past 12 months were given below. Also, you have the annualized returns of the monthly T-Bill for the same time period

	Monthly returns		Annualized
Month	XYZ	S&P	T-Bill %
1	1.00%	1.75%	0.45%
2	-0.58%	-0.83%	0.45%
3	-0.42%	-0.67%	0.45%
4	0.17%	-0.08%	0.45%
5	0.08%	-0.17%	0.30%
6	1.92%	1.67%	0.30%
7	-1.00%	-1.25%	0.30%
8	1.17%	0.92%	0.30%
9	1.00%	1.75%	0.30%
10	-0.25%	0.25%	0.20%
11	-0.42%	2.42%	0.20%
12	0.25%	-0.25%	0.20%

1. The beta of XYZ is

A. Between 0.25 and 0.40

B. Between 0.41 and 0.75

C. Between 0.76 and 1.00

D More than 1

2.

The annualized market premium is

A.0.13%

B.0.43%

C.5.18%

D.None of the above

3. Assume the current annualized monthly T-Bill rate is 2.5% The discount rate that should be used to estimate the common stock price of XYZ is approximately

A 3.25%

B 4.0%

C 4.87%

D 5.18%