The risk-free rate is 4.15 percent.What is the expected risk premium on this stock given the following information?
A)5.88 percent
B)5.95 percent
C)6.10 percent
D)6.23 percent
E)6.27 percent

Name: The risk-free rate is 4.15 percent.What is the expected risk premium on this stock given the following information? A)5.88 percent B)5.95 percent C)6.10 percent D)6.23 percent E)6.27 percent
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Question

The risk-free rate is 4.15 percent.What is the expected risk premium on this stock given the following information? 
A)5.88 percent 
B)5.95 percent 
C)6.10 percent 
D)6.23 percent 
E)6.27 percent

Quizplus · Accepted Answer

E(R) = (.35 × 14) + (.65 × 8) = 10.10Risk premium = 10.10 - 4.15 = 5.95 percent

The Risk-Free Rate Is 4