1. Delphi Automotive PLC has a beta of 2. and the expected market return is 0.1. If Treasury bills are currently yielding 0.03 percent, find the cost of capital for Delphi Automotive PLC (round your answers).
a. 23.5% b. 17.0% c. none of the answers is correct d. 12.4% e. 22.1%
2. Assume that QUALCOMM Inc has an annual expected profit of 40 million dollars and a historical standard deviation estimation of 60 million dollars for its profit distribution. If the Value at Risk (VaR) level is set at 0.125 and corresponding Z-value is 1.15, find how much QUALCOMM Inc could potentially lose in millions of dollars for a given year.
a. 51.86
b. 29.00
c. none of the answers is correct
d. 19.00
e. 31.63