Question 1: You have chosen to set aside $500 to purchase a new television in one year. You are told that the account will earn 7% interest over the year (interest is earned annually, no compounding within the year). You expect that inflation over the course of this year will be 2.4% and that the price of an equivalent TV will increase by this amount as well. Calculate your percentage increase (or decrease) in real purchasing power over the course of the year.

Question 2: Firm ABC had Current Operating Assets of $122 million and Current Operating Liabilities of $74 million last year. This year their Current Operating Assets were $129 million and their Current Operating Liabilities were $78 million. Given this information, what is the impact on Free Cash Flow from the Working Capital for the firm? Ensure that your final answer is signed correctly with regards to impact on FCF (whether positive or negative).

Question 3: The tab in this spreadsheet titled "Data for Question 12" includes adjusted daily closing prices for Electronic Arts and the SPDR S&P 500 ETF for the past 5 years. From this data, calculate the Beta for EA assuming that the SPDR S&P 500 ETF is a good metric for market returns. Based on this, what is the CAPM expected return for Electronic Arts using your historical Beta, the current 10-year Treasury rate of 1.63% and an expected market risk premium equal to 5.6%?