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Stock A has a beta of 0.5, and investors expect it to return 3%. Stock B...

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Finance

Stock A has a beta of 0.5, and investors expect it to return 3%.Stock B has a beta of 1.5, and investors expect it to return 5%.Use the CAPM to calculate the market risk premium and the expectedrate of return on the market. (Enter your answers as a wholepercent.)

Market Risk Premium : ____ %

Expected market rate of return ___ %

Answer & Explanation Solved by verified expert
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Given that stock A has a beta of 05 and investors expect it to return 3 Stock B has a beta of 15 and investors expect it to return 5 Expected returnRisk free rateBetaExpected market rate of returnRisk free rate    See Answer
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Stock A has a beta of 0.5, and investors expect it to return 3%.Stock B has a beta of 1.5, and investors expect it to return 5%.Use the CAPM to calculate the market risk premium and the expectedrate of return on the market. (Enter your answers as a wholepercent.)Market Risk Premium : ____ %Expected market rate of return ___ %

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