Assume that the risk-free rate is 4.3 percent and the market risk premium is 6.1 percent. What is the expected return for the overall stock market?
a. |
6.1% |
|
b. |
7.4% |
|
c. |
4.3% |
|
d. |
10.4% |
|
e. |
1.8% |
Expected return = risk free rate + beta * market risk premium
beta of market = 1
=>
Expected return = 4.3% + 1 * 6.1%
= 10.4%
choose d)
Assume that the risk-free rate is 4.3 percent and the market risk premium is 6.1 percent....
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