Part $1.$ The risk$-$free rate of return is $3\mathrm{.}5$ percent, the inflation rate is $2\mathrm{.}9$ percent, and the market return$($S&P $500)$ is $10\mathrm{.}5$ percent. What is the expected rate of return on a stock with a beta of $1\mathrm{.}43?$

A$.8\mathrm{.}7\%$

B$.13\mathrm{.}5\%$

C$.4\mathrm{.}6\%$

D$.13\mathrm{.}1\%$

E$.14\mathrm{.}2\%$

Part $2.$ Naveen purchased $400$ shares of stock at a price of $$62\mathrm{.}30$ per share and sold the shares for $$64\mathrm{.}25$ each. He also received $$738$ in dividends. If the inflation rate was $1\mathrm{.}9\%,$ what was the exact real rate of return on this investment?

A$.1\mathrm{.}54\%$

B$.1\mathrm{.}60\%$

C$.6\mathrm{.}09\%$

D$.2\mathrm{.}11\%$

E$.2\mathrm{.}96\%$

Part $3.$ Which one of the following is not an example of a sunk cost?

A$.$ $$2000$ reduction in Product A revenue if a firm commences selling Product B$$

B$.$ $$2000$ paid last year to rent equipment$$

C$.$ $$2000$ in revenue from that last quarter$$

D$.$ $$2000$ spent on assets $6$ months ago$$

E$.$ $$2000$ paid for inventory that is still on shelves

Part $4.$ Which of the following statements regarding a firm$$s after$-$tax cost of debt is accurate?

A$.$ It is equal to the coupon rate on the latest bonds issued by the company$$

B$.$ It is based on the current yield to maturity of the company's outstanding bonds times $(1-$tax rate$)$

C$.$ It must be estimated as it cannot be directly observed in the market$$

D$.$ It is based on the original yield to maturity on the latest bonds issued by a company$$

E$.$ It is based on the current yield to maturity of the company$$s outstanding bonds.