The Risk-free rate equals 2%, and the expected return on the Market equals 10%. Stock ABC has a Beta of 2.

1. The slope of the security market line equals:

a) 4

b) 6

c) 8

d) 10

e) Impossible to determine

2. What is the expected return for Stock ABC?

a) 10%

b) 16%

c) 18%

d) 20%