What is the expected market risk premium

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Problem 1: Suppose Apple stock's expected return is 9.06% and Disney stock's expected return is 4.86%. Assume the capital asset pricing model holds and Apple stock's beta is greater than Disney stock's beta by 0.21. What is the expected market risk premium?

Group of answer choices

Option 1: 20 percent

Option 2: 12.6 percent

Option 3: 9.5 percent

Option 4: 13.92 percent

Reference no: EM132773957

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