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,
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% |
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Business Mathematics
Authors: Charles MillerStanley SalzmanStanley SalzmanGary Clendenen
11th Edition
0321500121, 9780321500120
