A stock has an expected return of $12\mathrm{.}60\%.$ Its beta is $1\mathrm{.}42$ and the risk$-$free rate is $5\mathrm{.}00\%.$ What is the market risk premium?

Hint:

Use CAPM to determine the market risk premium

rs $=$ r$++$ RPm x bstock

$$ a$.5\mathrm{.}35\%$

O b$.5\mathrm{.}23\%$

$0$ c$.5\mathrm{.}49\%$

$$ d$.5\mathrm{.}10\%$