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Consider the following probability distribution of returns on stock A and the market portfolio. Assume that the CAPM holds and correctly prices all assets. In
Consider the following probability distribution of returns on stock A and the market portfolio. Assume that the CAPM holds and correctly prices all assets. In other words, assume that Stock A's expected return from the probability distribution above is the same as its CAPM expected return. Based on the assumption, what should the risk-free rate be? Note: Answers should be expressed in percentage rounded to the nearest 0.01%-for example, enter 1.23456% as 1.23 in the answer box below. Intermediate results should not be rounded to less than 8 decimal places
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