What is expected market risk premium

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Reference no: EM131875558

Suppose you observe the following situation: Rate of Return If State Occurs State of Probability of Economy State Stock A Stock B Bust .20 −.08 −.06 Normal .60 .13 .13 Boom .20 .48 .28 Assuming the capital asset pricing model holds and Stock A's beta is greater than Stock B's beta by .55, what is the expected market risk premium? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Reference no: EM131875558

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