1. In the beginning of 2017, a bonds yield to maturity is 7.40%. It includes a 1.90% inflation risk premium. In 2017, actual inflation in the economy was 2.10%. What is the bond's real rate of return in 2017? Ignore other risk factors. You expect to hold the bond until maturity.
7.40%
5.30%
7.60%
5.50%
2. Common stock of PR Co. has an expected return of 12%. The expected market return is 14% and the risk-free rate is 2%. What is PR Co’s beta coefficient?
1.2
0.7
.95
.83