Suppose You Observe the Following Situation: Assume the Capital

question 17

Multiple Choice

Suppose you observe the following situation: Assume the capital asset pricing model holds and stock A's beta is greater than stock B's beta by 0.21.What is the expected market risk premium?

• A)8.8 percent
• B)9.5 percent
• C)12.6 percent
• D)17.9 percent
• E)20.0 percent

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