QUE-1

Polycorp is considering a new project. The project has beta () that is twice that of the firm's existing assets (projects). Polycorp's existing assets have a required return (cost of capital) of 10%, the market risk premium is 5% and the risk free rate is 4%. Calculate the beta for the new project. Provide your answer accurate to two decimal places.

QUE-2

The annual nominal rate is j_m= 0.13pa. What is the effective annual rate as a percentage to two decimal places? The number of compounding periods is 6. Enter your answer as a decimal eg 17.42% = .1742 to four decimal places. Accuracy of one basis point. Tip: use excel to get the required accuracy.