Use the table for the question(s) below.

	Market Price	Cash Flow in One Year
Security	Today	Poor Economy	Good Economy
A	200	840	0
B	600	0	840
C	???	840	4,200

Suppose that security C had a risk premium of 30% and the probability of good and poor economy are equal.

What is the risk-free rate?

A) 110%

B) 4%

C) -30%

D) 5%

What is the price of security C?

A) $800

B) $1,936.5

C) $1,867

D) $2,016