1. Bloome Co.'s stock has a 25% chance of producing a 65% return, a 50% chance of producing a 10% return, and a 25% chance of producing a –16% return. What is the firm's expected rate of return (in percent)?
2. You are offered an investment with returns of $ 1,579 in year 1, $ 3,590 in year 2, and $ 5,511 in year 3. The investment will cost you $ 8,903 today. If the appropriate Cost of Capital (quoted interest rate) is 11.9 %, what is the Net Present Value of the investment? Enter your answer to the nearest $.01. Do not use the $ sign or commas in your answer. If the NPV is negative, use the - sign.