1. UTC Company's stock has a beta of 1.5, the risk-free rate is 3%, and the market risk premium is 8%. What is the firm's required rate of return?
11.65%
11.95%
12.25%
12.55%
15.00%
2. GAMA Inc.'s stock has a 40% chance of producing a 25% return, a 35% chance of producing a 10% return, and a 25% chance of producing a -20% return. What is the firm's expected rate of return?
10.15%
8.50%
9.90%
9.65%
10.40%