.Suppose two projects A and B have the following cash flows

CASH FLOWS
YEAR	Project A	Project B
0 1 2 3 4 5	($700) 100 200 300 400 500	($700) 300 300 300 300 300

Q1. What is the payback period for project A and B.

Q2. Asset P has a beta of 0.9. The risk-free rate of return is 8 percent, while the return on the market portfolio of assets is 14 percent. What is the assets required rate of return?

Q3. A firm is evaluating a proposal which has an initial investment of $35,000 and has cash flows of $10,000 in year 1, $20,000 in year 2, and $10,000 in year 3. Calculate the payback period of the project.

Q4 The covariance of the returns on the two securities, A and B's is -0.0005. The standard deviation of A's returns is 4% and the standard deviation of B's return is 6%. What is the correlation between the returns of A and B?

Q5 Company X has beta of 1.45. The expected risk-free rate of interest is 2.5% and the expected return on the market as a whole is 10%. Using the CAPM, what is ABC's expected return?