Question: 1. Capital Asset Pricing Model: If the expected return on the market is 13.47 percent and the risk-free rate is 4 percent, what is the

1. Capital Asset Pricing Model: If the expected return on the market is 13.47 percent and the risk-free rate is 4 percent, what is the expected return for a stock with a beta equal to 1.75? (Carry out calculations to 4 decimal places (e.g., 14.26%, which is 0.1426)

2. What is the market risk premium for the set of circumstances described? (Write answer in decimals rounded to two decimals. (e.g., 14.26%, which is 0.1426)?)

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