Question 16: Consider an Asset that we will just call 'A'. As A's volatility increases, the spread or difference between its arithmetic and geometric rates of return (a) Increases (b) Decreases () Is not affected I Question 17: A firm is expected to make $2 in free cash flow per share next year. Its free cash flow is then expected to grow by 2.5% per year, forever. The firm's cost of equity (discount rate on equity) is 9.5%. What is the fair price of the firm's stock? (a) $76.53 (b) $14.11 () $21.05 (d) $28.57