A stock will provide a rate of return of either -18 or 34 percent. Both possibilities are
Fantastic news! We've Found the answer you've been seeking!
Question:
A stock will provide a rate of return of either -18 or 34 percent. Both possibilities are equally likely.
If Treasury bills yield 8 percent, and investors believe that the stock offers a satisfactory return, what must be the market risk premium of the stock?
| A.8% |
| B.0% |
| C.16% |
| D.4% |
Expert Answer:
Posted Date:
