Share A's beta is 0.2 and investors are expecting a 5% return. Stock B's beta is 1.8 and investors are expecting a 13% return. Use the CAPM to calculate the market risk premium and the expected rate of return in the market. (Enter your answers exactly as percentages.)

Market Risk Premium: %

Expected Market Rate of Return: %

Answer rating: 100% (QA)

The CAPM formula is r rf rm rf where r expected return on the sto... View the full answer