If the expected return on the market is 16%, then using the historical risk premium of 8.5%, what is the current risk-free rate? (pick one)

4.5%

7.5%

10.0%

10.5%

12.5%

The return pattern on your favorite stock has been 5%, 8%, -12%, 15%, 21% over the last five years. What is your average return and total change in wealth per year over the period?

4.5%, 6.5%

15%, 21%

7.4%, 6.8%

9.2%, 8.6%