11.51%
The required rate of return = risk-free rate + Beta * (market risk premium)
Here, we multiply the beta of 1.32 times the market risk premium of 5.50%, then add the risk-free rate of 4.25% to get the required rate of return, or 11.51%.
Insurance: An arrangement to provide protection against a possible eventuality.
I believe that the bonds issued by the U.S government are the saving bonds. Corporate bonds are bonds issued by corporations in order to raise money for business expansion. Junk bonds are types of bonds that are lower rated however, they are potentially higher-paying. Municipal bonds are bonds issued by a state or local government for the purpose of financing social amenities and infrastructure such as improvements of highways, state buildings, libraries, parks and schools.
