7. Given a risk-free rate (7) of 6 percent and a market risk premium (fm-) of 8.2 percent, calculate the required rate of return on each of the following stocks, based on the betas given in Table 8.8: a. American Electric Power b. Citigroup c. General Mills d. Wynn Resorts 8 The stock of Pirmo Hot I FIGURE 8.8 Expected Return from a Portfolio of Stocks of American Electric Power (A) and Boeing (B) 17 16 100% in Boeing (B) 15 100% in American Electric Power! 14 13 Expected Return on Portfolio () (%) 12 1 10 - 1 10 1 20 1 30 40 50 Proportion Invested in A (w) (%) 60 70 75 80 90 100 -- 15 w 1800 Duna potente 7. Given a risk-free rate (7) of 6 percent and a market risk premium (fm-) of 8.2 percent, calculate the required rate of return on each of the following stocks, based on the betas given in Table 8.8: a. American Electric Power b. Citigroup c. General Mills d. Wynn Resorts 8 The stock of Pirmo Hot I FIGURE 8.8 Expected Return from a Portfolio of Stocks of American Electric Power (A) and Boeing (B) 17 16 100% in Boeing (B) 15 100% in American Electric Power! 14 13 Expected Return on Portfolio () (%) 12 1 10 - 1 10 1 20 1 30 40 50 Proportion Invested in A (w) (%) 60 70 75 80 90 100 -- 15 w 1800 Duna potente