Question: Suppose you are studying the risk-expected return tradeoff for two stocks. One stock, Jefferson Co has a beta of 1.3 and expected return of 13.6%,

Suppose you are studying the risk-expected return tradeoff for two stocks. One stock, Jefferson Co has a beta of 1.3 and expected return of 13.6%, while the other stock Marion Inc, has a beta of 0.7 and expected return of 8.1%. According to the CAPM, what must be the market risk premium? Answer in decimal format rounded to four decimal places. For example, if you answer is 8.25%, enter .0825.

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