1. If the risk-free rate is 6.80 percent and the risk premium is 5.8 percent, what is the required return? (Round your answer to 1 decimal place.)

Required Return %

2. The average annual return of an index from 1986 to 1995 was 14.55 percent. The average annual yield on Treasury bills over the same period was 3.00 percent. What was the market risk premium during these ten years? (Round your answer to 2 decimal places.)

Average market risk premium %

3. Suppose Netflix, Inc., has a beta version of 2.86. If the market return is expected to be 10.60 percent and the risk-free rate is 4.50 percent, what is Netflix's risk premium? (Round your answer to 2 decimal places.)

Netflix risk premium %

Answer rating: 100% (QA)

1 To calculate the required return you can use the formula Required R... View the full answer