The Risk-Free Rate Is 4 A)585%
B)6

question 91

Multiple Choice

The risk-free rate is 4.20%. What is the expected risk premium on this stock given the following information?
$\begin{array}{lrr}\text { State of the Economy } & \text { Probability of } & \text { Rate of Return if } \\& \text { State of Economy } & \text { state occurs }\\\text { Boom } & .28& 23\% \\\text { Normal } & .72 &11 \%\end{array}$

• A)5.85%
• B)6.59%
• C)8.22%
• D)10.16%
• E)11.21%

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