1."Assume that Microsoft common stock has a Beta of 1.8, the risk-free rate of interest is 3.5% and the market risk premium is 5%. According to the CAPM, what should be investors required rate of return for Microsoft stock?"
2. United Air has a 5.75% coupon 15 year bond (par value = 1,000). Assume that coupon payments are semi-annual and that the current price is $973.55. What is the yield-to-maturity of this bond? Be sure to report on an annualized basis and as a raw number - i.e. if your answer is 6.5%, input as 6.5.