1. The current price of XYZ stock is $80.00. Dividends are expected to grow at 5% indefinitely and the most recent dividend was $2.75. What is the required

   rate of return on XYZ stock?

   		7.35%
   		6.65%
   		7.63%
   		9.69%
   		8.61%

2. Which of the following statements is most correct?

   		The slope of the security market line is beta.
   		A stock with a negative beta must have a negative required rate of return.
   		If a stock's beta doubles its required rate of return must double.
   		If a stock has a beta equal to 1.0, its required rate of return will be unaffected by changes in the market risk premium.
   		None of the statements above is correct.