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%