1. Company A has a beta of 0.70, while Company B's beta is 1.45. The required return on the stock market is 11.00%, and the risk-free rate is 2.25%. What is the difference between A's and B's required rates of return? (Hint: First find the market risk premium, then find the required returns on the stocks.) Do not round your intermediate calculations.

a. 4.71%

b. 4.25%

c. 4.30%

d. 5.06%

e. 5.01%

2. What is the PV of an ordinary annuity with 10 payments of $4,100 if the appropriate interest rate is 5.5%?

a. $30,904.27

b. $32,140.44

c. $37,085.12

d. $31,213.31

e. $32,449.48