The expected return on stock A is 11.15 percent. The expected return on stock B is 8.30 percent. Assuming CAPM holds, if the beta of stock A is higher than the beta of stock B by 0.13, what should the risk premium be? (Round answer to 2 decimal places, e.g. 2.36%.) Risk premium %

The expected return on stock A is 11.15 percent. The expected return on stock B is 8.30 percent. Assuming CAPM holds, if the beta of stock A is higher than the beta of stock B by 0.13, what should the risk premium be? (Round answer to 2 decimal places, e.g. 2.36%.) Risk premium %

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 12P: Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average...

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The expected return on stock A is 11.15 percent. The expected return on stock B is 8.30 percent. Assuming CAPM holds, if the beta of
stock A is higher than the beta of stock B by 0.13, what should the risk premium be? (Round answer to 2 decimal places, e.g. 2.36%.)
Risk premium
%

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