1. CAPM Required Return A company has a beta of 1.10. If the market return is expected to be 11.5 percent and the risk-free rate is 3.75 percent, what is the company's required return?
16.03%
12.65%
12.28%
16.40%
2. Unbiased Expectations Theory One-year Treasury bills currently earn 5.70 percent. You expect that one year from now, one-year Treasury bill rates will increase to 5.95 percent. If the unbiased expectations theory is correct, what should the current rate be on two-year Treasury securities?
5.700%
11.650%
5.950%
5.825%