Questions #$28$ to #$30$ use the following setup:

The stock of Wells Fargo has a beta of $1\mathrm{.}2$ and an expected return of $11\mathrm{.}6\%.$ A risk$-$free asset has a return of $3\mathrm{.}2\%($this is the risk$-$free interest rate$).$

What is the market risk premium?

$8\mathrm{.}4\%$

$9\mathrm{.}67\%$

$6\mathrm{.}50\%$

$7\%$

Questions #$28$ to #$30$ use the following setup:

The stock of Wells Fargo has a beta of $1\mathrm{.}2$ and an expected return of $11\mathrm{.}6\%.$ A risk$-$free asset has a return of $3\mathrm{.}2\%($this is the risk$-$free interest rate$).$

What is the expected return of a portfolio that has $40\%$ invested in the stock and $60\%$ invested in the risk$-$free asset?

$7\mathrm{.}4\%$

$6\mathrm{.}56\%$

$8\mathrm{.}24\%$

$7\mathrm{.}81\%$