Stock A has a beta of .6, and investors expect it to return 10%. Stock B has

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Stock A has a beta of .6, and investors expect it to return 10%. Stock B has a beta of 1.4, and investors expect it to return 14%. Use the CAPM to calculate the market risk premium and the expected rate of return on the market.

1. Market risk premium?

2. The expected market rate of return?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

Posted Date: Aug 22, 2020 01:01 PM

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Stock A has a beta of .6, and investors expect it to return 10%. Stock B has

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Fundamentals of Corporate Finance

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