1. Netflix, Inc. has a beta of 3.84. If the market return is expected to be 11.30 percent and the risk-free rate is 4.00 percent, what is Netflix's risk premium? (Round your answer to 2 decimal places.)
2. As many of you are sure to have noted, municipal bonds are exempt from federal taxes, and most interest on Federal bonds are exempt from state and local taxes. Given that tax exemption, which type of investor benefits most from the tax exemption- the high-income investor, or the low? Explain in detail in your reply.