1. Calculate the variance of the following returns.
Year Return
1 -0.06
2 0.16
3 0.21
4 0.27
5 0.17
Enter the answer with 6 decimals, e.g. 0.123456.
2. A stock has an expected return of 0.11, its beta is 0.91, and the expected return on the market is 0.05. What must the risk-free rate be?