Jack's company offers him a choice between a cash and stock bonus.

The cash bonus is $20,000 bonus.

The stock bonus consists of 100 shares of the company's stock, but these cannot be traded now.

Jack will have the right to sell these shares only after 1 year.

Currently the stock is being traded at $190 per share.

Jack's wife is risk averse. She advises him to take the cash and make a deposit in the local bank for 1 year. The interest rate is 2% and compounding takes place annually.

On the other hand, Jack is risk neutral and does not care about the stock market volatility.

If Jack chooses the stock bonus, what is the minimum annual return that he expects from the stock?

Jack's wife is also optimistic about the company's prospects and thinks that the stock price will be up by 10% at the end of this year. Yet, because of her risk aversion, she prefers the cash bonus.What is the minimum dollar value of the risk in her mind?