A stock has a beta of 1.58 and an expected return of 16.2 percent.The risk-free rate is 3.8 percent.What is the market risk premium?
A) 7.85 percent
B) 10.01 percent
C) 11.72 percent
D) 12.50 percent
E) 13.40 percent

Name: A stock has a beta of 1.58 and an expected return of 16.2 percent.The risk-free rate is 3.8 percent.What is the market risk premium? A) 7.85 percent B) 10.01 percent C) 11.72 percent D) 12.50 percent E) 13.40 percent
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Question

Quizplus · Accepted Answer

16.2 = 3.8 + 1.58(MRP); MRP = 7.85 percent

A Stock Has a Beta of 1