Question: The expected return for RE Ltd. stock calculated using the CAPM is 6.0%. The risk-free rate is 1.25% and the beta of the stock is

The expected return for RE Ltd. stock calculated using the CAPM is 6.0%. The risk-free rate is 1.25% and the beta of the stock is 0.9. Calculate the implied market risk premium. capm 6.0 rusk free rate 1.25 beta 0.9 implied market re = rfr+beta*mrket risk 6% = 6% +(0.9*rpm)

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