Given the information in the following table, calculate the risk premium to be earned of optimal portfolio using the index model. This is the expected return from the portfolio minus the risk-free rate.

Asset	Expected return (%)	Beta	Residual std dev
Stock A	0.18	1.9	0.22
Stock B	0.11	1.1	0.14
Stock C	0.09	0.7	0.115
T-bills	0.03	0	0
Index (market)	0.1
Market std deviation	0.2

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To calculate the risk premium of the optimal portfolio using the index model we need to use the form... View the full answer