The equity premium is 8.8% and the risk -free rate is 4.6%. What is the expected...
The equity premium is 8.8% and the risk -free rate is 4.6%. What is the expected return on the market portfolio?
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A) 4.2% |
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B) 9.6% |
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C) 10.4% |
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D) 13.4% |
Homework Answers
Correct option is > D. 13.40%
Equity risk premium = Expected return on market - Risk free rate
8.8% = Expected return on market - 4.6%
Expected return on market = 8.8%+4.6%
Expected return on market = 13.40%
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